Brinker International Inc (NYSE:EAT) Emerges as a Strong Candidate Under Navellier's Growth Investing Principles

In growth investing, few methods have received as much notice as the systematic plan presented by Louis Navellier in his important work, "The Little Book That Makes You Rich." The plan depends on finding companies that show solid, quickening growth in several financial areas, including earnings revisions, sales momentum, profit growth, and strong cash generation. By using a strict screening process built on these eight main rules, investors try to find stocks with the chance for better returns, using both basic strength and good momentum. This approach focuses on not only past results but also future-pointing signs that point to continued growth and better performance than the market.

BRINKER INTERNATIONAL INC (NYSE:EAT) appears as an interesting candidate when measured against Navellier’s growth-focused standards. The company, which runs and franchises famous restaurant brands like Chili’s Grill & Bar and Maggiano’s Little Italy, shows several traits that match closely with the ideas described in the book.

• Positive Earnings Revisions and Surprises: A main idea of Navellier’s plan is that upward changes in analyst estimates often come before solid stock performance, as they show better business conditions. For Brinker International, the average EPS estimate for the next quarter has been increased by more than 23% in the last three months, showing rising confidence among analysts. Also, the company has reported positive earnings surprises in each of the last four quarters, with an average beat of 23.2%. This steadiness in going past expectations not only builds trust but also often results in more estimate increases, creating a good cycle that can push share prices up.

• Quickening Sales and Earnings Growth: Growth investors favor companies that are growing their top and bottom lines at a quickening rate. Brinker’s revenue growth is notable, with a 21% year-over-year rise and an almost 21% quarter-over-quarter climb. Even more notable is the earnings growth: EPS jumped 116% over the last year and 54.7% quarter-over-quarter. Such solid growth rates are key to Navellier’s structure, as they show the company is taking market share and getting better at operational efficiency.

• Growing Profitability and Solid Cash Flow: Navellier notes that sales growth should come with better margins, as it shows the company’s skill in turning revenue into profits effectively. Brinker’s operating margin increased by 66.3% over the last year, a clear signal of better profitability. Also, free cash flow, a vital measure of financial health and flexibility, rose by 85.5%, giving the company means to put money into growth, lower debt, or give capital back to shareholders.

• High Return on Equity: Another part of the plan is a high return on equity (ROE), which shows management’s success in creating profits from shareholder investments. Brinker’s ROE of 103.3% is very strong, putting it in front of many others in the industry and highlighting its effective use of capital.

A look at Brinker’s wider fundamental profile, as detailed in its fundamental analysis report, supports its appeal. The company has a good overall rating, with high marks in profitability and health, pointing to sound finances and few liquidity or solvency worries. While its valuation is fair compared to industry peers, it is the growth measures—especially the fast recent earnings and cash flow patterns—that make it notable as a possible candidate for growth-focused plans.

For investors wanting to look into other companies that fit similar standards, the screen used to find Brinker International can be found here. This tool lets users change settings and find more stocks that match Navellier’s growth investing ideas.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consider their financial situation and risk tolerance before making any investment decisions.