Palantir Technologies Inc-A (NASDAQ:PLTR) Screens as a Top Growth Stock Using Navellier's Little Book System

Louis Navellier's "The Little Book That Makes You Rich" describes a methodical system for finding excellent growth stocks using eight basic rules. This system looks for companies with solid earnings momentum, increasing sales, growing profitability, and sound financial condition. The approach intends to find stocks set for major price gains by selecting businesses that regularly beat forecasts and display better operational performance. One company that recently appeared from this screening method is Palantir Technologies Inc-A (NASDAQ:PLTR).

Earnings Revisions and Surprises

The Little Book system highlights rising earnings revisions and positive surprises as signs of fundamental business quality. When analysts raise their forecasts, it often shows better operational clarity and belief in future results.

• The average EPS estimate beat over the last four quarters stands at 14.9%
• Analysts have revised next quarter's EPS estimates upward by 23.28% over the past three months
• The company has delivered three positive EPS surprises in its last four quarterly reports

These numbers show Palantir's capacity to regularly beat forecasts, causing analysts to update their projections. This trend of surpassing estimates fits well with Navellier's focus on companies that consistently deliver positive surprises, building momentum.

Sales Growth and Operating Margin Expansion

Rising revenue growth paired with growing operating margins points to a company scaling its business while becoming more profitable. Navellier's system specifically looks for businesses displaying this effective pairing.

• Quarterly sales growth reached 62.79% compared to the same quarter last year
• Annual revenue growth stands at 47.23% over the trailing twelve months
• Operating margin has grown by 58.04% year-over-year

The large sales growth numbers indicate Palantir's solid market standing and need for its data analytics platforms. More significantly, the major operating margin growth shows the company is reaching operational leverage, increasing sales quicker than costs, a main trait wanted by growth investors.

Earnings Growth and Cash Flow Strength

Lasting earnings growth backed by solid cash flow creation forms another key part of the Little Book system. Companies that turn earnings into actual cash flow have more financial options and business stability.

• Quarterly EPS growth surged 110% compared to the same quarter last year
• Annual EPS growth reached 82.86% over the trailing twelve months
• Free cash flow grew by an notable 278% over the past year

Palantir's triple-digit quarterly EPS growth and remarkable free cash flow growth show not just accounting profits but real financial quality. The cash flow growth greatly exceeds earnings growth, pointing to high-quality earnings and solid operational performance.

Return on Equity and Fundamental Assessment

High return on equity shows efficient use of shareholder capital, finishing Navellier's full growth structure. Companies creating solid returns on equity usually have competitive strengths and able management teams.

Palantir achieves a 16.62% return on equity, easily passing the system's 10% minimum requirement. This level of return puts the company in the top group of its software industry competitors, showing good capital use.

According to ChartMill's detailed fundamental analysis, Palantir receives an overall rating of 7 out of 10. The company displays outstanding growth traits with a perfect 10/10 growth rating, supported by solid profitability (7/10) and financial health (8/10). While valuation remains high at 2/10, the exceptional growth numbers and fundamental quality give reason for the premium price.

Investment Considerations

Palantir presents a strong case for growth investors using the Little Book system. The company fits several criteria at once, solid earnings revisions, notable surprises, increasing sales, margin growth, sound cash flow growth, and high returns on equity. These traits indicate a business undergoing both fast growth and better operational performance.

The screening method that found Palantir can be used to find other possible growth candidates. Investors wanting to review more companies meeting these strict criteria can view the full screening results for more research options.

Disclaimer: This article presents objective analysis based on published data and screening methodologies. It does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results.