Growth stocks are popular among investors due to their above-average financial growth, which attracts attention and can lead to exceptional returns. However, finding a growth stock that lives up to its potential can be challenging. These stocks typically come with higher risk and volatility, and investing in a stock where the growth story is ending can result in significant losses.
To help identify cutting-edge growth stocks, the Zacks Growth Style Score analyzes a company’s growth prospects beyond traditional attributes. BellRing Brands is one such stock currently recommended by the system, boasting a favorable Growth Score and a top Zacks Rank.
Research has shown that stocks with strong growth features tend to outperform the market, especially those with a Growth Score of A or B and a Zacks Rank #1 or 2. Here are three key factors that make BellRing Brands a compelling growth pick:
1. Earnings Growth: Double-digit earnings growth is preferred by growth investors, indicating strong prospects for the company. BellRing Brands has a historical EPS growth rate of 26.7% and is projected to grow by 26.5% this year, surpassing the industry average of 14.4%.
2. Cash Flow Growth: High cash flow growth is crucial for growth-oriented companies, enabling them to take on new projects without external funding. BellRing Brands currently has a year-over-year cash flow growth of 57.8%, higher than industry peers.
3. Earnings Estimate Revisions: Positive trends in earnings estimate revisions often correlate with stock price movements. BellRing Brands has seen upward revisions in current-year earnings estimates, with the Zacks Consensus Estimate increasing by 0.1% over the past month.
In conclusion, BellRing Brands has earned a Growth Score of A and a Zacks Rank #2, making it a potential outperformer and a solid choice for growth investors.