NerdWallet Inc. (NASDAQ:NRDS) Embodies Louis Navellier's High-Growth Stock Strategy

In the world of growth investing, few strategies have received as much notice as the one detailed in Louis Navellier’s "The Little Book That Makes You Rich." The method centers on finding companies showing solid, quickening growth using eight specific financial and operational measures. These consist of rising earnings revisions, steady positive earnings surprises, strong sales and earnings growth, increasing margins, good cash flow, and high returns on equity. The aim is to find businesses that not only are increasing quickly but also have the financial control and market drive to maintain that growth. This tactic has shown results over time, especially for investors looking for access to high-potential equities before they become widely known.

NERDWALLET INC-CL A (NASDAQ:NRDS) appears as a notable candidate according to this screening method. The company, which offers online financial tools and comparison marketplaces for consumers and small businesses, displays several traits that match closely with Navellier’s growth stock selection measures.

Earnings Revisions and Surprises

A main idea of Navellier’s tactic is that positive earnings revisions frequently come before upward price movements, as they show bettering analyst confidence. NRDS displays a 4.52% rise in the next quarter’s EPS estimates over the last three months, showing that analysts are becoming more positive about short-term performance. Also, the company has reported four straight positive earnings surprises, with an average beat of almost 1,197%. This steady outperformance indicates solid execution and the chance for future estimate increases, a key part in the growth investor’s approach.

Sales and Earnings Growth

Growth investing depends greatly on top-line and bottom-line increase. NRDS reports notable growth numbers:

• Revenue growth year-over-year (TTM): 28.75%
• Quarterly sales growth (Q2Q): 24.10%
• EPS growth year-over-year: 646.15%
• Quarterly EPS growth: 191.67%

These numbers not only reach but greatly surpass the usual limits set in growth screens, emphasizing the company’s capacity to quickly scale both revenue and profitability.

Operating Margin and Cash Flow

Increasing operating margins show that a company is growing effectively, turning more revenue into profit. NRDS displays a notable 405.81% gain in operating margin over the past year, pointing to better operational leverage. In the same way, free cash flow growth jumped by 350%, giving the company financial room to put money into future growth or handle economic uncertainty, a key feature for lasting expansion.

Earnings Momentum and ROE

Navellier notes the value of earnings speed-up and high returns on equity. NRDS shows solid momentum, with current quarterly EPS growth greatly exceeding earlier periods. Its return on equity is at 12.08%, well above the lowest 10% level suggested in the book, showing good use of shareholder capital.

Fundamental Health and Valuation

A look at NRDS’s wider fundamental profile, available in its detailed report, supports its attractiveness. The company gets a fair overall fundamental score of 5 out of 10, with clear strong points in financial health and growth, balanced by medium profitability and high valuation. Its balance sheet is strong, with little debt and good liquidity, lowering short-term risk. While the stock is not low-cost compared to some industry peers, its outstanding growth numbers may support the valuation for growth-oriented investors.

Conclusion

NRDS matches firmly with the ideas presented in "The Little Book That Makes You Rich," showing quickening growth, positive revisions, jumping cash flow, and good operational gains. For investors using Navellier’s tactic, it stands as a possibly interesting candidate that fits several measures for high-quality growth investing.

For those wanting to look into other companies that fit this method, more screening outcomes are available here.

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.