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5 Top Earnings Growth Stocks to Buy Right Away

Take a company's revenues over a given period of time, subtract the cost of production and you will have its earnings! Earnings growth enthralls all, right from the top brass to research analysts. And why not? If the company doesn't make money, it won't be able to stand the test of time.

This metric is also considered the most vital variable in influencing the share price. Better-than-expected earnings performance normally leads to a rally in the share price. However, in addition to actual earnings, expectations of earnings play a significant role in influencing the price of a stock.

Earnings Estimates Determine Share Prices

We have often seen a decline in the stock price despite earnings growth and a rally in the price following an earnings decline. This is largely a result of a company's earnings failing to meet market expectations.

Earnings estimates embody analysts' opinion on factors such as sales growth, product demand, competitive industry environment, profit margins and cost control. Thus, earnings estimates serve as a valuable tool while making investment decisions. Earnings estimates also help analysts assess the cash flow to determine the fair value of a firm.

Investors, thus, should be on the lookout for stocks that are ready to make a big move. Hence, it is important for investors to buy stocks that have historical earnings growth and are also seeing a rise in quarterly and annual earnings estimates.

Screening Parameters:

In order to shortlist stocks that have striking earnings growth and positive estimate revisions, we added the following parameters:

Zacks Rank equal to 1 (Only Zacks' 'Strong Buys' are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.) You can see the complete list of today's Zacks #1 Rank stocks here .

5-Year Historical EPS Growth (%) greater than X-Industry (Stocks that possess strong EPS growth history.)

% Change EPS F(0)/F(-1) greater than or equal to 5 (Companies that witnessed year-over-year earnings growth rate of 5% or more in the last reported fiscal.)

% Change Q1 Estimates over the last 4 weeks greater than zero (Stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks.)

% Change F1 Estimates over the last 1 week greater than zero (Stocks that have seen their annual earnings estimates revised higher in the last 1 week.)

% Change F1 Estimates over the last 4 weeks greater than zero (Stocks that have seen their annual earnings estimates revised higher in the last 4 weeks.)

The above criteria narrowed down the universe of around 7,886 stocks to only 10. Here are the top five stocks:

Marriott Vacations Worldwide CorporationVAC develops, markets, sells, and manages vacation ownership and related products under the Marriott Vacation Club and Grand Residences by Marriott brands. The Zacks Consensus Estimate for its current-year earnings increased 9.6% over the last 60 days. The company's expected earnings growth rate for the current quarter and year are 19.7% and 16.1%, respectively.

Best Buy Co., Inc.BBY operates as a retailer of technology products, services, and solutions in the United States, Canada, and Mexico. The Zacks Consensus Estimate for its current-year earnings increased 10.9% over the last 60 days. The company's expected earnings growth rate for the current quarter and year are 25% and 10.2%, respectively.

athenahealth, Inc.ATHN provides network-based medical record, revenue cycle, patient engagement, care coordination, and population health services for medical groups and health systems. The Zacks Consensus Estimate for its current-year earnings rose 31% over the last 60 days. The company's expected earnings growth rate for the current quarter and year are 125% and 51.6%, respectively.

Boise Cascade CompanyBCC manufactures wood products and distributes building materials in the United States and Canada. The Zacks Consensus Estimate for its current-year earnings increased 26.1% over the last 60 days. The company's expected earnings growth rate for the current quarter and year are 53.9% and 36.7%, respectively.

ePlus inc.PLUS provides information technology (IT) products and services, flexible leasing and financing solutions, and enterprise supply management in the United States. The Zacks Consensus Estimate for its current-year earnings increased 2.3% over the last 60 days. The company's expected earnings growth rate for the current quarter and year are 26.7% and 13.6%, respectively.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks' portfolios and strategies are available at:https://www.zacks.com/performance

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athenahealth, Inc. (ATHN): Free Stock Analysis Report

ePlus inc. (PLUS): Free Stock Analysis Report

Boise Cascade, L.L.C. (BCC): Free Stock Analysis Report

Marriot Vacations Worldwide Corporation (VAC): Free Stock Analysis Report

Best Buy Co., Inc. (BBY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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