Rigel Pharmaceuticals Inc (NASDAQ:RIGL) Shows Explosive Growth, Fits Navellier's 'Little Book' Strategy

Rigel Pharmaceuticals Inc (NASDAQ:RIGL) has become an interesting option for growth investors using the screening method from Louis Navellier's "The Little Book That Makes You Rich." This investment style finds companies showing solid fundamental momentum with eight specific measures, such as earnings revisions, sales growth, margin improvement, and return numbers. The method aims to find stocks with improving business results before these gains are fully known by the market.

Earnings Revisions and Surprises

The screening method gives great importance to analyst opinion and earnings results, as higher revisions and steady surprises frequently come before good price action. Rigel shows notable ability in these parts:

• Next quarter EPS estimates have been moved up by 307% over the past three months
• The company has exceeded EPS estimates in all of the last four quarterly reports
• The average earnings surprise over this period is a notable 440%

These numbers show that analysts are regularly adjusting their views to match Rigel's better operational results, a known trait wanted by growth investors using Navellier's method.

Growth Path and Profitability Improvement

Key to the screening process is finding companies with increasing revenue growth and improving profitability. Rigel's performance numbers show clear momentum:

• Quarterly revenue growth year-over-year hit 176%
• Yearly revenue growth was 106% over the trailing twelve months
• Operating margin growth rose by 664% compared to the previous year
• Free cash flow generation grew by 235% each year

These numbers show not only solid top-line growth but also clear operational efficiency, indicating the company is growing effectively while making its profitability better.

Earnings Momentum and Returns

The strategy especially values increasing earnings growth and high returns on capital, both of which Rigel shows in large amounts:

• Quarterly EPS growth year-over-year hit a very high 5,567%
• Yearly EPS growth was 729% over the trailing twelve months
• Return on equity is at 119%, well above the minimum 10% level needed by the screening method

Such fast earnings growth along with high returns on shareholder capital places Rigel as a leading option for growth-focused investment plans.

Fundamental Review and Valuation

Based on Rigel's detailed fundamental analysis report, the company gets an overall score of 6 out of 10, with specific high points in growth and valuation measures. The analysis mentions Rigel's "solid growth while it also appears inexpensive," making a notable mix for both growth and value investors. The company displays very good profitability ratios, with return on assets at 47% and return on invested capital at 69%, both placed near the top in the biotechnology field. Even with these solid operational numbers, Rigel trades at large discounts to industry averages on standard valuation measures, like price-to-earnings and enterprise-value-to-EBITDA ratios.

Investment Points

While the fundamental numbers match well with Navellier's growth standards, investors should be aware of several items. The company's Altman-Z score indicates some financial risk, although this is lessened by solid cash flow generation and workable debt levels. Also, as a clinical-stage biotechnology company, Rigel is still open to the natural risks and regulatory unknowns of drug development and sales.

Find Related Options

For investors looking to use similar growth standards to other possible options, the Louis Navellier Little Book screening methodology gives a structured way to find companies with related fundamental traits. This screen can be changed and improved based on personal investment choices and market situations.

Disclaimer: This article presents factual information for educational purposes only and should not be construed as investment advice, a recommendation to buy or sell securities, or an endorsement of any particular investment strategy. Investors should conduct their own research and consult with qualified financial professionals before making investment decisions.