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Stocks with rising earnings estimates have significantly outperformed the S&P 500 year after year, whereas stocks with falling earnings estimates have underperformed the S&P 500 year after year.
Enter the Zacks Rank.
The Zacks Rank has made the process of identifying stocks with changing earnings estimates easy and very profitable. It’s a reliable tool that helps you trade with confidence regardless of your trading style and/or risk tolerance.
The Zacks Rank uses four factors related to earnings estimates to classify stocks into five groups, ranging from ‘Strong Buy’ to ‘Strong Sell.’ Importantly, it allows individual investors to take advantage of trends in earnings estimate revisions and benefit from the power of institutional investors.
Let’s take a closer look at the Zacks Rank in action across several stocks, including beloved NVIDIA (NVDA - Free Report) , The Progressive Corp. (PGR - Free Report) , and HCA Healthcare (HCA - Free Report) .
NVIDIA
Benefiting massively from the AI-frenzy, NVIDIA shares have moved higher along with earnings estimate revisions, with the stock jumping back into a Zacks Rank #1 (Strong Buy) on Feb. 23rd. Since then, shares have gained nearly 15% in value.
Image Source: Zacks Investment Research
The company’s growth has been remarkable, with record Q4 revenue of $22.1 billion climbing 409% year-over-year and driven by unrelenting demand for AI chips.
Progressive
Progressive shares have benefited from consistently better-than-expected quarterly results as of late, up 15% since jumping into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
The stock remains a prime consideration for growth-focused investors, with consensus expectations for its current fiscal year (FY24) suggesting 60% earnings growth on 15% higher sales. Peeking ahead to FY25, expectations currently allude to an additional 12.5% growth in earnings on nearly 13% higher sales.
HCA Healthcare
HCA Healthcare has enjoyed positive earnings estimate revisions across multiple timeframes, landing the stock into a Zacks Rank #1 (Strong Buy) on Feb. 9th and gaining 9% since.
Image Source: Zacks Investment Research
The company’s shareholder-friendly nature can’t be overlooked, with shares currently yielding 0.8% paired with a sustainable payout ratio sitting at 13% of its earnings. Dividend growth is also apparent, with HCA boasting an 11% five-year annualized dividend growth rate.
Bottom Line
As the examples above show, listening to the Zacks Rank can consistently result in market-beating gains, as positive earnings estimate revisions provide the fuel needed to move higher.
All three stocks above – NVIDIA (NVDA - Free Report) , The Progressive Corp. (PGR - Free Report) , and HCA Healthcare (HCA - Free Report) – presently sport a Zacks Rank #1 (Strong Buy), reflecting upward trending earnings estimate revisions.
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3 Powerful Examples of the Zacks Rank
Stocks with rising earnings estimates have significantly outperformed the S&P 500 year after year, whereas stocks with falling earnings estimates have underperformed the S&P 500 year after year.
Enter the Zacks Rank.
The Zacks Rank has made the process of identifying stocks with changing earnings estimates easy and very profitable. It’s a reliable tool that helps you trade with confidence regardless of your trading style and/or risk tolerance.
The Zacks Rank uses four factors related to earnings estimates to classify stocks into five groups, ranging from ‘Strong Buy’ to ‘Strong Sell.’ Importantly, it allows individual investors to take advantage of trends in earnings estimate revisions and benefit from the power of institutional investors.
Let’s take a closer look at the Zacks Rank in action across several stocks, including beloved NVIDIA (NVDA - Free Report) , The Progressive Corp. (PGR - Free Report) , and HCA Healthcare (HCA - Free Report) .
NVIDIA
Benefiting massively from the AI-frenzy, NVIDIA shares have moved higher along with earnings estimate revisions, with the stock jumping back into a Zacks Rank #1 (Strong Buy) on Feb. 23rd. Since then, shares have gained nearly 15% in value.
Image Source: Zacks Investment Research
The company’s growth has been remarkable, with record Q4 revenue of $22.1 billion climbing 409% year-over-year and driven by unrelenting demand for AI chips.
Progressive
Progressive shares have benefited from consistently better-than-expected quarterly results as of late, up 15% since jumping into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
The stock remains a prime consideration for growth-focused investors, with consensus expectations for its current fiscal year (FY24) suggesting 60% earnings growth on 15% higher sales. Peeking ahead to FY25, expectations currently allude to an additional 12.5% growth in earnings on nearly 13% higher sales.
HCA Healthcare
HCA Healthcare has enjoyed positive earnings estimate revisions across multiple timeframes, landing the stock into a Zacks Rank #1 (Strong Buy) on Feb. 9th and gaining 9% since.
Image Source: Zacks Investment Research
The company’s shareholder-friendly nature can’t be overlooked, with shares currently yielding 0.8% paired with a sustainable payout ratio sitting at 13% of its earnings. Dividend growth is also apparent, with HCA boasting an 11% five-year annualized dividend growth rate.
Bottom Line
As the examples above show, listening to the Zacks Rank can consistently result in market-beating gains, as positive earnings estimate revisions provide the fuel needed to move higher.
All three stocks above – NVIDIA (NVDA - Free Report) , The Progressive Corp. (PGR - Free Report) , and HCA Healthcare (HCA - Free Report) – presently sport a Zacks Rank #1 (Strong Buy), reflecting upward trending earnings estimate revisions.