AURINIA PHARMACEUTICALS INC (NASDAQ:AUPH) Passes Louis Navellier's Strict Growth Stock Screen

A screening method based on Louis Navellier's "The Little Book That Makes You Rich" has found several companies displaying the traits of excellent growth stocks. The process uses eight basic rules meant to find businesses with solid earnings momentum, increasing sales, rising profitability, and effective capital use. This organized process selects for companies that are not just growing, but whose growth is speeding up and being acknowledged through rising analyst changes and good earnings surprises. The next part looks at one such company that recently met this multi-factor test.

Earnings Revisions and Surprises

A main idea of the Navellier method is finding companies where Wall Street analysts are currently raising their earnings estimates, as this frequently comes before more good news. AURINIA PHARMACEUTICALS INC (NASDAQ:AUPH) shows this with a 9.09% upward change to its next quarter EPS estimate over the last three months. Even more notably, the company has set a perfect history of beating expectations, exceeding EPS estimates in all of the last four quarters by an average of 194.67%. This repeated skill to do better than forecasts is a strong sign of operational quality and management's ability to set low expectations and deliver high results, a main factor for investor trust and stock price gains in the growth investing model.

Sales and Earnings Growth Path

The test requires solid and speeding growth in both top-line revenue and bottom-line earnings. Aurinia fits this need with convincing numbers that show a business in a solid growth stage.

• Revenue Growth: The company reached a 25.59% rise in trailing twelve-month revenue and a 22.41% growth in the latest quarter compared to the same quarter last year.
• Earnings Growth: The growth in profitability is even more noticeable, with a 243.33% jump in trailing twelve-month EPS and a remarkable 1500% EPS growth in the last quarter year-over-year.

This pairing of solid sales increase and fast profit growth is precisely what the process looks for, showing the company is effectively scaling its activities and turning revenue into earnings at a rising rate.

Profitability and Cash Flow Increase

Beyond simple growth, the process focuses on getting better operational efficiency and financial condition. Aurinia displays notable advancement on these points.

• Operating Margin: The company's operating margin has grown by over 203% in the last year, a clear sign that it is increasing sales without a matching rise in costs, thus becoming much more profitable.
• Free Cash Flow: Aurinia's free cash flow increased by 329.13% over the last year. Solid and increasing cash flow is important as it gives the company financial room to pay for future growth, reduce debt, or put money into new chances without needing outside funding.

Earnings Momentum and Return on Equity

The last parts of the test search for speeding earnings momentum and effective use of shareholder capital.

• Earnings Momentum: The process demands that the latest quarterly EPS growth is faster than the growth from the similar quarter a year before. Aurinia's current EPS growth of 1500% is much higher than the 112.5% growth it reported in the same quarter last year, confirming solid positive momentum.
• Return on Equity (ROE): With an ROE of 18.08%, Aurinia easily passes the test's 10% minimum. A high ROE shows that management is creating solid returns on the capital provided by shareholders, a sign of a well-managed growth company.

Fundamental Rating Summary

An examination of Aurinia's wider fundamental picture matches the results of the Little Book test. The company gets a good overall fundamental rating. Its health is viewed as very good, with solid liquidity and solvency measures, showing a low chance of financial trouble. While its profitability score is medium, this is probably a sign of its recent move to profitability, a typical phase for clinical-stage biopharmaceutical companies. The valuation seems fair, particularly when thinking about its outstanding growth picture, making what analysts often call a "growth at a reasonable price" (GARP) chance. A more complete breakdown is in the full fundamental analysis report.

For investors wanting to find other companies that match this strict growth description, the test used to find Aurinia Pharmaceuticals is open to the public. You can view and change the test here to find more possible candidates that meet Louis Navellier's requirements for excellent growth stocks.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation to buy or sell any security, or an endorsement of any investment strategy. All investments involve risk, including the possible loss of principal. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.