CorMedix Inc (NASDAQ:CRMD) Identified as a Top Growth Stock Candidate

A systematic method for growth investing can help investors find companies with good potential for expansion. One established method comes from Louis Navellier's "The Little Book That Makes You Rich," which lists eight fundamental rules for choosing good growth stocks. These rules concentrate on earnings revisions, sales and earnings growth, profitability, and financial condition to find companies showing strong operational momentum. A recent screen using these strict criteria has identified CorMedix Inc (NASDAQ:CRMD) as a notable candidate for more detailed review.

Meeting the Little Book Criteria

CorMedix Inc shows very good alignment with Navellier's growth framework, displaying strong financial metrics that meet the main principles of the strategy.

• Positive Earnings Revisions: The average EPS estimate for the next quarter has been adjusted upward by a notable 113.55% over the last three months. This is an important signal, as analysts usually revise estimates higher only when they have strong belief in a company's near-term outlook, directly meeting the first rule of the strategy.
• Positive Earnings Surprises: The company has exceeded analyst predictions in each of the last four quarterly reports, with an average earnings surprise of 44.57%. Regularly beating estimates often makes analysts re-examine their future forecasts, which can act as a driver for the stock price, fitting well with the second rule.
• Accelerating Growth: CorMedix is showing very high growth acceleration across important metrics. Revenue growth quarter-over-quarter is at 4,829.39%, while year-over-year revenue growth is a remarkable 14,970.65%. This fast sales expansion is a sign of a company in a high-growth phase, satisfying the third rule of increasing sales growth.
• Expanding Profitability: The company's operating margin has increased by over 100% in the past year. This shows that the company is not just growing its top line but is also becoming much more profitable by managing costs, which is the core of Navellier's fourth rule on expanding operating margins.
• Strong Cash Flow Generation: CorMedix shows a notable 197% growth in free cash flow over the past year. Good and increasing cash flow gives the company financial flexibility to fund its own expansion without needing external financing, a key part of the fifth rule.

Fundamental Analysis Overview

A look at CorMedix's wider fundamental profile shows a company with a good financial base. The stock gets a solid fundamental rating of 7 out of 10, indicating sound health compared to its industry peers. Its profitability is significant, with a Return on Equity (ROE) of 23.19%, easily meeting the strategy's need for a high ROE and doing better than most of its industry. From a valuation standpoint, the company seems attractively priced, with a forward P/E ratio of 4.81 that indicates it is trading at a notable discount to both the industry and the wider market, in spite of its high growth rates. For a detailed breakdown of these metrics, you can review the full fundamental analysis report.

Investment Considerations

While the company's fit with the Little Book strategy is notable, investors should think about the full situation. CorMedix is a commercial-stage pharmaceutical company concentrated on its lead product, DefenCath. The outstanding growth rates, while impressive, are happening from a relatively small base as the company moves from development to commercialization. This can lead to variable percentage changes in its financial metrics. Also, the company has a record of negative earnings and operating cash flow over the past five years, though its most recent TTM period shows a sharp and positive change. The company's clean balance sheet, with no debt and good liquidity ratios, offers a solid buffer as it carries out its commercial plan.

Finding Similar Opportunities

CorMedix Inc was found using a stock screen based on Louis Navellier's eight rules for growth investing. This method is made to find companies with strong operational momentum and improving financials. For investors interested in finding other companies that pass this strict screen, you can access and adjust the strategy yourself via the Little Book That Makes You Rich screener on ChartMill.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The information presented should not be used as the sole basis for making any investment decision. Investors should conduct their own independent research and consult with a qualified financial advisor before making any investment.