Nutex Health Inc (NASDAQ:NUTX) Screens as a High-Growth Stock Using Navellier's 'Little Book' Method

Growth investing methods often look for companies that are not only increasing in size, but are doing so with faster speed and better financial performance. One organized method for this search is described in Louis Navellier's The Little Book That Makes You Rich, which lists eight basic rules for choosing excellent growth stocks. These rules center on upward earnings adjustments and surprises, rising sales, widening margins, good cash flow, earnings increases, upward earnings speed, and a large return on equity. A filter using these measures recently found Nutex Health Inc (NASDAQ:NUTX) as a possible choice, justifying a more detailed examination by investors using this method.

Fit with the "Little Book" Growth Rules

Nutex Health, a firm operating micro-hospitals and population health networks, seems to display a number of the high-growth traits Navellier's method aims to find. The given data indicates the company matches or passes many of the filter's numerical thresholds.

• Upward Earnings Adjustments & Surprises: A key part of the method is that higher estimates from analysts frequently point to good core business patterns. For NUTX, the average EPS forecast for the next quarter has increased by 43.7% over the past three months. Also, the company has reported a positive earnings surprise in 3 of the past 4 quarters, with an average beat of a remarkable 2,386.6%. Steady overperformance makes analysts adjust their models, which can be a significant force for stock price adjustment.

• Strong Sales and Earnings Increases: The method requires clear increases in revenue and profit. Nutex Health meets this with notable numbers. Year-over-year sales increase is 236.0%, while quarterly sales have increased 239.9% versus the same quarter last year. More significantly, this sales increase is becoming profit. Year-over-year EPS increase is 873.6%, and quarterly EPS has risen 551.2%.

• Widening Profitability and Good Cash Flow: Growing sales alone is insufficient, Navellier notes that excellent companies increase profits even more quickly by widening margins. Nutex Health's operating margin has increased by 278.1% over the last year, showing much better operational effectiveness. The company is also producing significant cash, with free cash flow increase over the past year above 3,319%, giving financial room to support future growth.

• Upward Earnings Speed and Large ROE: The method looks for speeding up, not just increase. The data shows NUTX's current quarterly EPS increase is much larger than its increase rate from the same quarter a year ago, indicating upward speed. Lastly, the company has a Return on Equity (ROE) of 36.0%, well above the filter's 10% lowest limit. A large ROE shows management is using shareholder money well to produce profits.

Fundamental Condition and Valuation Setting

Apart from the specific filter rules, an examination of Nutex Health's wider fundamental situation, as described in its detailed fundamental analysis report, gives important setting. The report gives NUTX a total fundamental score of 7 out of 10. Main points include outstanding scores for financial condition and valuation, together with very strong growth measures.

The company's balance sheet seems firm, with very good liquidity ratios and an acceptable debt situation. Most notable is the valuation review. In spite of its high growth rates, NUTX trades at a Price/Earnings ratio of 8.7, which is viewed as fair on a pure basis and low compared to both its industry group and the wider S&P 500. This pairing of high growth and low valuation is seen as an uncommon and possibly interesting situation for growth and value investors. Yet, the report also points out the company's varied record of profitability and cash flow over the past five years, stressing the need to decide if the present performance shows a lasting new path.

A Beginning for More Study

The use of Navellier's organized filter has effectively highlighted Nutex Health as a company showing many signs of a high-growth stock. Its high growth rates, widening margins, and large return on equity match well with the method's goals. When combined with a seemingly low valuation and a sound balance sheet, the reason for more study is strong.

It is vital to recall that any filtering tool gives a beginning, not a final answer. Investors should perform complete research, thinking about elements like the durability of growth, competitive environment, and total market situation. The present good patterns in both the long-term and short-term S&P 500 may give a helpful setting for growth stocks, but company-specific risks are always present.

For investors wanting to examine other companies that pass this growth-oriented filter, you can see and adjust the live filtering outcomes here.

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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 is based on data provided and should not be the sole basis for any investment decision. Investors should conduct their own independent research and consult with a qualified financial advisor before making any investment.