If EPS Growth Is Important To You, Babylon Pump & Power (ASX:BPP) Presents An Opportunity

editorial-team@simplywallst.com (Simply Wall St)

Thu, May 15, 2025, 6:25 PM 4 min read

For beginners, it tin look similar a bully thought (and an breathtaking prospect) to bargain a institution that tells a bully communicative to investors, adjacent if it presently lacks a way grounds of gross and profit. Sometimes these stories tin unreality the minds of investors, starring them to put with their emotions alternatively than connected the merit of bully institution fundamentals. While a good funded institution whitethorn prolong losses for years, it volition request to make a nett eventually, oregon other investors volition determination connected and the institution volition wither away.

In opposition to each that, galore investors similar to absorption connected companies similar Babylon Pump & Power (ASX:BPP), which has not lone revenues, but besides profits. While nett isn't the sole metric that should beryllium considered erstwhile investing, it's worthy recognising businesses that tin consistently nutrient it.

AI is astir to alteration healthcare. These 20 stocks are moving connected everything from aboriginal diagnostics to cause discovery. The champion portion - they are each nether $10bn successful marketcap - determination is inactive clip to get successful early.

Strong net per stock (EPS) results are an indicator of a institution achieving coagulated profits, which investors look upon favourably and truthful the stock terms tends to bespeak large EPS performance. So a increasing EPS mostly brings attraction to a institution successful the eyes of prospective investors. It's an outstanding feat for Babylon Pump & Power to person grown EPS from AU$0.000015 to AU$0.00026 successful conscionable 1 year. Even though that maturation complaint whitethorn not beryllium repeated, that looks similar a breakout improvement.

Top-line maturation is simply a large indicator that maturation is sustainable, and combined with a precocious net earlier involvement and taxation (EBIT) margin, it's a large mode for a institution to support a competitory vantage successful the market. Not each of Babylon Pump & Power's gross past twelvemonth was revenue from operations, truthful support successful caput the gross and borderline numbers utilized successful this nonfiction mightiness not beryllium the champion practice of the underlying business. Babylon Pump & Power's EBIT margins are level but, worryingly, its gross is really down. While this whitethorn rise concerns, investors should analyse the reasoning down this.

You tin instrumentality a look astatine the company's gross and net maturation trend, successful the illustration below. To spot the existent numbers, click connected the chart.

See our latest investigation for Babylon Pump & Power

Since Babylon Pump & Power is nary giant, with a marketplace capitalisation of AU$15m, you should definitely cheque its currency and debt before getting excessively excited astir its prospects.