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I Ran A Stock Scan For Earnings Growth And Lazydays Holdings (NASDAQ:LAZY) Passed With Ease

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Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

So if you're like me, you might be more interested in profitable, growing companies, like Lazydays Holdings (NASDAQ:LAZY). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

Check out our latest analysis for Lazydays Holdings

How Fast Is Lazydays Holdings Growing Its Earnings Per Share?

In business, though not in life, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS). So like a ray of sunshine through a gap in the clouds, improving EPS is considered a good sign. It is therefore awe-striking that Lazydays Holdings's EPS went from US$0.17 to US$2.34 in just one year. Even though that growth rate is unlikely to be repeated, that looks like a breakout improvement. Could this be a sign that the business has reached an inflection point?

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. I note that Lazydays Holdings's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. Lazydays Holdings shareholders can take confidence from the fact that EBIT margins are up from 2.8% to 8.9%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

earnings-and-revenue-history
earnings-and-revenue-history

While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for Lazydays Holdings?

Are Lazydays Holdings Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

The first bit of good news is that no Lazydays Holdings insiders reported share sales in the last twelve months. Even better, though, is that the Chairman & CEO, William Murnane, bought a whopping US$206k worth of shares, paying about US$13.70 per share, on average. Big buys like that give me a sense of opportunity; actions speak louder than words.

Along with the insider buying, another encouraging sign for Lazydays Holdings is that insiders, as a group, have a considerable shareholding. Indeed, they hold US$14m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 5.9% of the company; visible skin in the game.

Should You Add Lazydays Holdings To Your Watchlist?

Lazydays Holdings's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. The incing on the cake is that insiders own a large chunk of the company and one has even been buying more shares. Because of the potential that it has reached an inflection point, I'd suggest Lazydays Holdings belongs on the top of your watchlist. It is worth noting though that we have found 2 warning signs for Lazydays Holdings that you need to take into consideration.

The good news is that Lazydays Holdings is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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