If EPS Growth Is Important To You, RHÖN-KLINIKUM (ETR:RHK) Presents An Opportunity

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Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like RHÖN-KLINIKUM (ETR:RHK). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide RHÖN-KLINIKUM with the means to add long-term value to shareholders.

Check out our latest analysis for RHÖN-KLINIKUM

How Quickly Is RHÖN-KLINIKUM Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That means EPS growth is considered a real positive by most successful long-term investors. To the delight of shareholders, RHÖN-KLINIKUM has achieved impressive annual EPS growth of 40%, compound, over the last three years. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.

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. It's noted that RHÖN-KLINIKUM's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. While we note RHÖN-KLINIKUM achieved similar EBIT margins to last year, revenue grew by a solid 7.1% to €1.8b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
XTRA:RHK Earnings and Revenue History January 16th 2025

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of RHÖN-KLINIKUM's forecast profits?

Are RHÖN-KLINIKUM Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. RHÖN-KLINIKUM followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Indeed, they hold €23m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 2.2% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.