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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
In contrast to all that, many investors prefer to focus on companies like PJT Partners (NYSE:PJT), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide PJT Partners with the means to add long-term value to shareholders.
View our latest analysis for PJT Partners
How Fast Is PJT Partners Growing?
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. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. PJT Partners managed to grow EPS by 11% per year, over three years. That's a pretty good rate, if the company can sustain it.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note PJT Partners achieved similar EBIT margins to last year, revenue grew by a solid 29% to US$1.5b. That's a real positive.
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of PJT Partners' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are PJT Partners Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$5.7b company like PJT Partners. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth US$251m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!
While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. Well, based on the CEO pay, you'd argue that they are indeed. Our analysis has discovered that the median total compensation for the CEOs of companies like PJT Partners with market caps between US$4.0b and US$12b is about US$7.9m.