Finding a great growth stock can be a tough task. Not only are there a wide range of choices, but the space can be extremely volatile and fraught with risk as well. But thanks to our new style score systemwe have been able to identify a few growth stocks which have incredible potential in the near term.
One such company that stands out in this regard is undoubtedly The Descartes Systems Group Inc (DSGX - Free Report) . Not only does this company have a favorable growth score, but it is ranked as a buy too. And while there are numerous reasons why DSGX is so attractive right now, we have highlighted three of the most important—and pertinent to growth investors—below:
Earnings Growth for DSGX
Arguably nothing is more important than earnings growth as surging profit levels is what most investors are after. And for growth investors, earnings growth in the double digits is definitely necessary and it is often an indication of strong prospects (and stock price gains) ahead for the company in question.
While DSGX has put up a historical EPS growth rate of 27.9%, investors should really focus on the projected growth. Here, DSGX is looking to grow at a rate of 31.9%, thoroughly crushing the industry average which calls for EPS growth of just 4.4%in comparison.
Cash Flow Growth for DSGX
Cash is the lifeblood of any business, but especially so for growth oriented companies. A positive figure here indicates that cash is flowing into the business (obviously a good thing), while a negative reading here means that net cash is exiting the company.
Right now, DSGX’s current cash flow growth is an impressive 14.8%, a level that is far higher than many of its peers, and the industry average. In fact, the industry average sees cash flow growth of just 0.6% in comparison, suggesting that DSGX is a better pick from a cash flow look.
DSGX Earnings Estimate Revisions Moving in the Right Direction
If the metrics outlined above weren’t enough investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for Descartes Systems lately, and now the earnings picture is looking a bit more favorable for the company.
Over the past 60 days, 4 EPS estimates have been revised higher compared to none lower, at least for the current year time frame. And the magnitude of these revisions has also been impressive, as the consensus estimate for the full year has surged from 32 cents per share to 36 cents per share today.
Bottom Line
For the reasons outlined above, investors shouldn’t be surprised to note that Descartes Systems has earned itself a growth score of ‘B’ as well as a Zacks Rank #2 (Buy). This means that we believe Descartes Systems stock is a potential outperformer that is an impressive choice for growth investors, making it a security that you need to keep on your radar in the near term.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Finding a great growth stock can be a tough task. Not only are there a wide range of choices, but the space can be extremely volatile and fraught with risk as well. But thanks to our new style score systemwe have been able to identify a few growth stocks which have incredible potential in the near term.
One such company that stands out in this regard is undoubtedly The Descartes Systems Group Inc (DSGX - Free Report) . Not only does this company have a favorable growth score, but it is ranked as a buy too. And while there are numerous reasons why DSGX is so attractive right now, we have highlighted three of the most important—and pertinent to growth investors—below:
Earnings Growth for DSGX
Arguably nothing is more important than earnings growth as surging profit levels is what most investors are after. And for growth investors, earnings growth in the double digits is definitely necessary and it is often an indication of strong prospects (and stock price gains) ahead for the company in question.
While DSGX has put up a historical EPS growth rate of 27.9%, investors should really focus on the projected growth. Here, DSGX is looking to grow at a rate of 31.9%, thoroughly crushing the industry average which calls for EPS growth of just 4.4%in comparison.
Cash Flow Growth for DSGX
Cash is the lifeblood of any business, but especially so for growth oriented companies. A positive figure here indicates that cash is flowing into the business (obviously a good thing), while a negative reading here means that net cash is exiting the company.
Right now, DSGX’s current cash flow growth is an impressive 14.8%, a level that is far higher than many of its peers, and the industry average. In fact, the industry average sees cash flow growth of just 0.6% in comparison, suggesting that DSGX is a better pick from a cash flow look.
DSGX Earnings Estimate Revisions Moving in the Right Direction
If the metrics outlined above weren’t enough investors should also consider the positive trends that we are seeing on the analyst estimate revision front. Analysts have been raising their estimates for Descartes Systems lately, and now the earnings picture is looking a bit more favorable for the company.
Over the past 60 days, 4 EPS estimates have been revised higher compared to none lower, at least for the current year time frame. And the magnitude of these revisions has also been impressive, as the consensus estimate for the full year has surged from 32 cents per share to 36 cents per share today.
Bottom Line
For the reasons outlined above, investors shouldn’t be surprised to note that Descartes Systems has earned itself a growth score of ‘B’ as well as a Zacks Rank #2 (Buy). This means that we believe Descartes Systems stock is a potential outperformer that is an impressive choice for growth investors, making it a security that you need to keep on your radar in the near term.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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