Growth stocks are popular among investors due to their above-average financial growth potential, which can lead to exceptional returns. However, finding a great growth stock can be challenging. These stocks are inherently risky and volatile, and there is a risk of investing in a stock whose growth story is coming to an end.
The Zacks Growth Style Score, part of the Zacks Style Scores system, goes beyond traditional growth attributes to analyze a company’s real growth prospects. This makes it easier to identify cutting-edge growth stocks. Federal Signal is one such stock that our system currently recommends, with a favorable Growth Score and a top Zacks Rank.
Stocks with strong growth features tend to outperform the market consistently. Combining a Growth Score of A or B with a Zacks Rank #1 or 2 can lead to even better returns. Federal Signal, a company that produces products for government, industrial, and commercial customers, is a great growth pick for several reasons.
Earnings growth is crucial for investors, as stocks with surging profit levels attract attention. Federal Signal’s expected EPS growth of 17.7% this year surpasses the industry average of 3.1%. The company also has strong cash flow growth, with a year-over-year growth rate of 24%, higher than many peers. Promising earnings estimate revisions further validate Federal Signal’s growth potential.
With a Growth Score of A and a Zacks Rank #2, Federal Signal is well-positioned for outperformance. Growth investors may consider betting on this stock for potential returns.