For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and 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.

In contrast to all that, many investors prefer to focus on companies like BlackLine (NASDAQ:BL), 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 BlackLine with the means to add long-term value to shareholders.

See our latest analysis for BlackLine

BlackLine's Improving Profits

Investors and investment funds chase profits, and that means share prices tend rise with positive earnings per share (EPS) outcomes. So a growing EPS generally brings attention to a company in the eyes of prospective investors. Commendations have to be given in seeing that BlackLine grew its EPS from US$0.17 to US$1.95, in one short year. Even though that growth rate may not be repeated, that looks like a breakout improvement.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. BlackLine shareholders can take confidence from the fact that EBIT margins are up from -7.9% to 2.6%, and revenue is growing. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Fortunately, we've got access to analyst forecasts of BlackLine's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are BlackLine Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, 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.

BlackLine insiders both bought and sold shares over the last twelve months, but they did end up spending US$45k more on stock than they received from selling it. At face value we can consider this a fairly encouraging sign for the company. Zooming in, we can see that the biggest insider purchase was by Co-CEO & Chairman of the Board Owen Ryan for US$348k worth of shares, at about US$46.11 per share.