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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Jet2 (LON:JET2). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Jet2 with the means to add long-term value to shareholders.

Check out our latest analysis for Jet2

Jet2's Improving Profits

In the last three years Jet2's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. In impressive fashion, Jet2's EPS grew from UK￡0.95 to UK￡2.01, over the previous 12 months. It's a rarity to see 111% year-on-year growth like that. That could be a sign that the business has reached a true inflection point.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Jet2 achieved similar EBIT margins to last year, revenue grew by a solid 34% to UK￡5.9b. That's encouraging news for the company!

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Fortunately, we've got access to analyst forecasts of Jet2's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Jet2 Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Jet2 shares worth a considerable sum. Indeed, they have a considerable amount of wealth invested in it, currently valued at UK￡537m. Coming in at 18% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.