Here's Why SHAPE Australia (ASX:SHA) Has Caught The Eye Of Investors

Yahoo

25-06-2025

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.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in SHAPE Australia (ASX:SHA). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
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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. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. SHAPE Australia managed to grow EPS by 14% per year, over three years. That's a good rate of growth, if it can be sustained.
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. While we note SHAPE Australia achieved similar EBIT margins to last year, revenue grew by a solid 7.3% to AU$903m. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Check out our latest analysis for SHAPE Australia
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for SHAPE Australia?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
We note that SHAPE Australia insiders spent AU$231k on stock, over the last year; in contrast, we didn't see any selling. That's nice to see, because it suggests insiders are optimistic. It is also worth noting that it was Chairman of the Board Greg Miles who made the biggest single purchase, worth AU$81k, paying AU$2.70 per share.
And the insider buying isn't the only sign of alignment between shareholders and the board, since SHAPE Australia insiders own more than a third of the company. Owning 45% of the company, insiders have plenty riding on the performance of the the share price. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. With that sort of holding, insiders have about AU$155m riding on the stock, at current prices. That's nothing to sneeze at!
One important encouraging feature of SHAPE Australia is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That should do plenty in prompting budding investors to undertake a bit more research - or even adding the company to their watchlists. It is worth noting though that we have found 1 warning sign for SHAPE Australia that you need to take into consideration.
The good news is that SHAPE Australia is not the only stock with insider buying. Here's a list of small cap, undervalued companies in AU with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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