Investors look for growth stocks to take advantage of above-average growth in financials, which can lead to exceptional returns in the market. However, finding a great growth stock can be challenging due to the above-average risk and volatility associated with these stocks. Investing in a stock where the growth story is ending could result in significant losses.
One way to identify cutting-edge growth stocks is by using the Zacks Growth Style Score, which goes beyond traditional growth attributes to analyze a company’s real growth prospects. Alphabet (GOOGL) is currently recommended by this system, with a favorable Growth Score and a top Zacks Rank.
Research has shown that stocks with strong growth features consistently outperform the market. Stocks with a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy) tend to perform even better.
Alphabet stands out as a great growth pick for several reasons. One key factor is its earnings growth. The company has a historical EPS growth rate of 23.4% and is expected to grow by 30.6% this year, surpassing the industry average.
Cash flow growth is also crucial for growth-oriented companies like Alphabet. The company’s year-over-year cash flow growth is 16.7%, higher than many of its peers and the industry average.
In addition to strong earnings and cash flow growth, positive earnings estimate revisions are a good indicator of future stock price movements. Alphabet’s current-year earnings estimates have been revised upward by 11.8% over the past month.
Alphabet’s overall performance has earned it a Zacks Rank #1 stock and a Growth Score of B. This combination suggests that Alphabet is a potential outperformer and a solid choice for growth investors.