Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) Fits Louis Navellier’s High-Growth Stock Criteria

Louis Navellier’s The Little Book That Makes You Rich presents an eight-rule system for finding high-growth stocks with solid earnings momentum, improving financials, and strong returns. The approach highlights firms with rising earnings revisions, steady surprises, faster sales and earnings growth, wider margins, healthy cash flow, and good return on equity (ROE). These factors assist investors in spotting businesses with lasting growth potential before the wider market notices.

Aurinia Pharmaceuticals Inc (NASDAQ:AUPH) appears as a potential match for Navellier’s growth-oriented strategy. The biopharmaceutical firm, specializing in autoimmune disease treatments, shows several important metrics that fit the system:

1. Rising Earnings Revisions & Surprises

Analysts have increased next-quarter EPS estimates by 35.8% in the last three months, showing growing optimism about Aurinia’s short-term profits. The company has also posted an average earnings surprise of 197.4% over the past four quarters, exceeding forecasts regularly, a key part of Navellier’s second rule. Strong surprises often lead to higher estimate revisions, creating a cycle that benefits stock performance.

2. Faster Revenue and Earnings Growth

Aurinia’s year-over-year revenue growth of 34% and quarterly sales growth of 22.4% show rising demand for its lupus nephritis drug, LUPKYNIS. More notably, EPS grew 243% YoY, with last quarter’s earnings jumping 1,500% compared to the same period a year earlier. This speed matches Navellier’s focus on firms where growth is not just happening but speeding up.

3. Wider Operating Margins & Healthy Cash Flow

The company’s operating margin rose by 154.5% over the past year, showing it is scaling its commercial efforts well. Free cash flow, a key sign of financial strength, grew 198% YoY, giving it room for more R&D or business growth, important for a clinical-stage biotech moving into commercialization.

4. High Return on Equity

Aurinia’s ROE of 11.38% beats 93.6% of its biotechnology peers, according to ChartMill’s review. Navellier favors firms that deliver good returns on shareholder equity, as it points to smart use of capital.

Financial Strength & Valuation

Aurinia’s fundamental report shows a mixed but encouraging picture:

• Profitability: Solid margins (gross margin of 88.2%, operating margin of 19.6%) but uneven past earnings.
• Financial Health: Low debt (Debt/Equity of 0.16) and good liquidity (Current Ratio of 5.93).
• Valuation: P/E of 28.1 is elevated but below industry peers, while forward P/E of 15.6 suggests earnings growth is priced more fairly.

Why Growth Investors Should Take Note

Navellier’s method looks for firms where financial gains come before major price increases. Aurinia’s mix of earnings momentum, margin growth, and cash flow improvement makes it a candidate for further gains if execution stays on track. While biotech has risks, like pipeline delays or payment issues, the stock’s fit with multiple Little Book rules makes it worth watching.

For investors looking for similar opportunities, the full Little Book screener lists more high-growth picks filtered using Navellier’s rules.

Disclaimer: This analysis is not investment advice. Investors should do their own research and assess risk before making decisions.