Here’s Why We Think AFT Pharmaceuticals (NZSE:AFT) Is Well Worth Watching

Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. 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.

So if this idea of high risk and high reward doesn’t suit, you might be more interested in profitable, growing companies, like AFT Pharmaceuticals (NZSE:AFT). 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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AFT Pharmaceuticals’ Earnings Per Share Are Growing

If you believe that markets are even vaguely efficient, then over the long term you’d expect a company’s share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Over the last three years, AFT Pharmaceuticals has grown EPS by 11% per year. That’s a good rate of growth, if it can be sustained.

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. AFT Pharmaceuticals maintained stable EBIT margins over the last year, all while growing revenue 22% to NZ$255m. That’s encouraging news for the company!

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.

View our latest analysis for AFT Pharmaceuticals

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for AFT Pharmaceuticals.

Are AFT Pharmaceuticals Insiders Aligned With All Shareholders?

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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don’t always get it right.

Shareholders in AFT Pharmaceuticals will be more than happy to see insiders committing themselves to the company, spending NZ$614k on shares in just twelve months. And when you consider that there was no insider selling, you can understand why shareholders might believe that there are brighter days ahead. It is also worth noting that it was Co-Founder Hartley Atkinson who made the biggest single purchase, worth NZ$566k, paying NZ$2.83 per share.

On top of the insider buying, we can also see that AFT Pharmaceuticals insiders own a large chunk of the company. To be exact, company insiders hold 69% of the company, so their decisions have a significant impact on their investments. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. In terms of absolute value, insiders have NZ$282m invested in the business, at the current share price. That’s nothing to sneeze at!

While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That’s because AFT Pharmaceuticals’ CEO, Hartley Atkinson, is paid at a relatively modest level when compared to other CEOs for companies of this size. Our analysis has discovered that the median total compensation for the CEOs of companies like AFT Pharmaceuticals with market caps between NZ$171m and NZ$683m is about NZ$1.2m.

AFT Pharmaceuticals’ CEO took home a total compensation package worth NZ$1.1m in the year leading up to March 2026. That seems pretty reasonable, especially given it’s below the median for similar sized companies. CEO compensation is hardly the most important aspect of a company to consider, but when it’s reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.

Is AFT Pharmaceuticals Worth Keeping An Eye On?

One positive for AFT Pharmaceuticals is that it is growing EPS. That’s nice to see. Better yet, insiders are significant shareholders, and have been buying more shares. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. Even so, be aware that AFT Pharmaceuticals is showing 1 warning sign in our investment analysis , you should know about…

There are plenty of other companies that have insiders buying up shares. So if you like the sound of AFT Pharmaceuticals, you’ll probably love this curated collection of companies in NZ that have an attractive valuation alongside 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.