Evercore Inc (NYSE:EVR) Identified as a Top Growth Stock by Navellier's Little Book Method

Investment methods that find companies with solid growth traits have long been a priority for investors aiming to do better than the market. One such method is detailed in Louis Navellier's "The Little Book That Makes You Rich," which lists eight particular rules for choosing leading growth stocks. These rules concentrate on earnings revisions, earnings surprises, sales growth, margin expansion, cash flow, earnings growth, earnings momentum, and return on equity. A recent filter using these strict rules on the market has found Evercore Inc - A (NYSE:EVR) as a company that fits this multi-part growth description.

Earnings Revisions and Surprises

A fundamental part of the Little Book method is finding companies where analyst forecasts are increasing, pointing to underlying business health. Evercore shows this through major upward earnings revisions, with analysts raising their next-quarter EPS estimates by 30.4% over the last three months. This large revision indicates increasing confidence in the company's short-term future. Also, Evercore has regularly beaten forecasts, reporting positive earnings surprises in each of the last four quarterly reports with an average beat of 39.47%. This history of beating estimates often makes analysts repeatedly adjust their models higher, creating a positive cycle that can help the stock price.

Sales and Earnings Growth

Speeding up growth in both revenue and profit is necessary for finding companies in an expansion phase. Evercore displays solid growth across several measures:

• Revenue growth of 22.67% year-over-year
• Quarterly sales growth of 41.59% compared to the same quarter last year
• EPS growth of 60% year-over-year
• Quarterly EPS growth of 70.59% compared to the same quarter last year

This speeding up is especially notable as the current quarterly EPS growth of 70.59% is higher than the previous comparable quarter's growth of 56.92%, showing the earnings momentum that Navellier notes as a key factor for growth stocks.

Profitability and Cash Flow Expansion

Beyond just growth, the Little Book method looks for companies that are growing in an efficient and profitable way. Evercore shows major operating margin expansion of 26.9% over the past year, showing the company is turning revenue growth into profits at a better rate. The company also shows good cash creation with free cash flow growth of 57.78% over the past year, giving financial room to support future growth plans without too much need for outside funding.

Return on Equity and Fundamental Health

Evercore provides outstanding returns to shareholders with a return on equity of 27.93%, much higher than the method's minimum need of 10%. This high ROE shows efficient use of shareholder money to create profits. According to ChartMill's detailed fundamental analysis, Evercore receives an overall rating of 7 out of 10, with special strength in profitability and financial health. The report notes that Evercore "gets an excellent profitability rating and is at the same time showing great financial health properties," while stating the company "is growing strongly while it is still valued neutral."

Valuation Considerations

While growth traits are solid, valuation measures show a varied view. The company trades at a P/E ratio of 22.85, which is somewhat high compared to industry peers but about the same as the wider S&P 500. However, the forward P/E of 15.84 and solid expected earnings growth of 34.32% indicate the valuation could be more acceptable when considering future growth potential.

Investment Implications

For investors using the Little Book method, Evercore represents an interesting example of a company satisfying several growth rules at the same time. The mix of strong analyst revisions, regular earnings surprises, speeding up sales and earnings growth, expanding margins, solid cash flow creation, and high returns on equity forms a detailed growth description. While the valuation needs thought, the fundamental growth traits match well with the method's focus on finding companies with lasting expansion potential.

Investors wanting to review other companies that meet the Little Book rules can view the full screening results to find other possible opportunities that fit this growth investment style.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security or strategy. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.