Argenx SE - ADR (NASDAQ:ARGX) Fits Navellier's 'Little Book' Growth Rules

Growth investors looking for systematic ways to pick stocks often use established methods that mix several fundamental factors. One such method is from Louis Navellier's "The Little Book That Makes You Rich," which lists eight specific rules for finding leading growth stocks. This plan concentrates on companies showing positive earnings revisions, strong surprises, increasing sales and earnings growth, widening margins, solid cash flow, and high returns on equity. The method tries to identify businesses in strong growth periods before the wider market completely sees their possibility.

Fitting the Little Book Rules

Argenx SE - ADR (NASDAQ:ARGX) shows clear agreement with Navellier's growth method in several areas. The biotechnology company's fundamental numbers display good performance against the eight main rules listed in the investment plan.

• Positive Earnings Revisions: Analysts have raised their next-quarter EPS estimates by 5.87% in the last three months, showing more confidence in short-term performance. This upward change suggests analysts are reacting to good news inside the company.

• Large Earnings Surprises: The company has beaten earnings forecasts in three of the last four quarters, with an average surprise of 3,962.36%. Repeated positive surprises frequently cause analysts to increase future estimates, starting a positive loop for growth investors.

• Increasing Sales Growth: Argenx displays notable revenue growth with 64.65% year-over-year growth and 91.37% quarter-over-quarter growth. Good sales momentum is important for growth stocks, showing market acceptance and business expansion.

• Widening Operating Margins: The company's operating margin has increased by 168.24% over the last year, showing better profitability as sales rise. Widening margins indicate the company can grow revenue without equal cost rises, improving earnings possibility.

• Good Cash Flow Generation: Free cash flow has jumped 140.74% over the last year, giving financial room for research, development, and other plans. Solid cash flow backs lasting growth without heavy dependence on outside funding.

• Notable Earnings Growth: The company shows outstanding earnings momentum with 1,512.50% year-over-year EPS growth and 272.66% quarter-over-quarter growth. These numbers reflect the fast profitability path that growth investors look for.

• Positive Earnings Momentum: Current quarterly EPS growth of 272.66% is much higher than the 211.20% growth from the same quarter last year, confirming quickening earnings momentum. This quickening is especially important in growth investing methods.

• High Return on Equity: With a 21.00% return on equity, Argenx effectively creates profits from shareholder investments. High ROE shows capable management use of capital to build shareholder value.

Fundamental Analysis Summary

The full fundamental analysis report for Argenx gives an overall score of 6 out of 10, with especially good results in growth and valuation compared to industry peers. The company shows very good profitability numbers, including profit margins of 41.97% and operating margins of 15.30%, both placing in the top group of the biotechnology industry. Financially, Argenx keeps a sound balance sheet with good liquidity ratios and little debt issues.

While the company's P/E ratio of 66.50 seems high by itself, it is a lower price than many industry peers. The valuation view gets better a lot when including growth forecasts, with analysts predicting 106.11% yearly EPS growth going forward. This growth path helps explain the current valuation numbers.

Investment Points

The mix of fast growth numbers, good cash flow creation, and acceptable valuation relative to growth forecasts makes Argenx an interesting option for growth-focused plans. The company's agreement with several Little Book rules indicates it has the fundamental features that in the past point to successful growth stocks. Still, investors should think about the natural instability in biotechnology investments and the competitive field for autoimmune disease treatments.

For investors wanting to look at more companies that fit these strict growth rules, the full Little Book screening results give a wider set of possible investments fitting Navellier's method.

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Disclaimer: This article presents factual information and analysis for educational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results, and all investments carry risk including potential loss of principal.