It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Optex Systems Holdings (NASDAQ:OPXS). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Optex Systems Holdings with the means to add long-term value to shareholders.

See our latest analysis for Optex Systems Holdings

How Fast Is Optex Systems Holdings Growing Its Earnings Per Share?

Optex Systems Holdings has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. In impressive fashion, Optex Systems Holdings' EPS grew from US$0.23 to US$0.52, over the previous 12 months. It's a rarity to see 129% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

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. The music to the ears of Optex Systems Holdings shareholders is that EBIT margins have grown from 9.2% to 14% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

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

Optex Systems Holdings isn't a huge company, given its market capitalisation of US$56m. That makes it extra important to check on its balance sheet strength.

Are Optex Systems Holdings Insiders Aligned With All Shareholders?

It's a good habit to check into a company's remuneration policies to ensure that the CEO and management team aren't putting their own interests before that of the shareholder with excessive salary packages. For companies with market capitalisations under US$200m, like Optex Systems Holdings, the median CEO pay is around US$658k.