Ubiquiti Inc (NYSE:UI) Matches Louis Navellier’s High-Growth Stock Criteria

Louis Navellier’s The Little Book That Makes You Rich presents an eight-rule system for finding high-growth stocks with solid earnings momentum, profitability, and financial strength. The approach focuses on companies showing rising earnings revisions, better-than-expected results, faster sales and earnings growth, improving margins, strong cash flow, and high returns on equity. These factors help identify businesses with lasting competitive edges and the chance for above-average gains.

One stock that fits these guidelines today is UBIQUITI INC (NYSE:UI). Here, we look at how UI matches Navellier’s growth investing standards.

Key Standards and UI’s Results

1. Rising Earnings Revisions
   Analysts have increased next-quarter EPS estimates by 13.78% in the last three months, showing higher confidence in UI’s short-term earnings. This matches Navellier’s emphasis on upward revisions as a sign of earnings momentum.

2. Better-Than-Expected Earnings
   UI has beaten analyst forecasts in three of the past four quarters, with an average surprise of 19.1%. Steady outperformance highlights the company’s execution and may lead to more estimate increases.

3. Growing Sales
   Revenue growth stays strong, with 21.4% year-over-year (TTM) and 34.7% quarter-over-quarter gains. Faster sales growth points to high demand for UI’s networking and business solutions.

4. Wider Operating Margins
   Operating margins have risen by 16.4% over the last year, reaching 30.7%. This shows effective cost control and pricing strength—important qualities for high-growth companies.

5. Healthy Cash Flow
   Free cash flow jumped 778.3% year-over-year, showing UI’s ability to turn earnings into cash. Strong cash generation supports reinvestment and possible returns to shareholders.

6. Earnings Growth
   EPS increased 56.3% year-over-year (TTM) and 134.4% quarter-over-quarter, highlighting faster profitability. This growth is key to Navellier’s method of spotting companies with rising earnings potential.

7. Positive Earnings Trend
   The most recent quarterly EPS growth (134.4%) was higher than the same period last year (96.9%), confirming an upward trend.

8. High Return on Equity (ROE)
   UI’s ROE of 125.9% is outstanding, showing efficient use of shareholder funds. Navellier favors firms with high and improving ROE as signs of strong management performance.

Core Strengths and Valuation

UI’s fundamental analysis report points to other advantages:

• Profitability: Exceptional ROE, ROA (42.3%), and ROIC (114.3%) rank UI among the best in its sector.
• Financial Stability: No debt and a strong Altman-Z score (23.92) indicate minimal bankruptcy risk.
• Growth Potential: Analysts expect 20.2% annual EPS growth and 9.5% revenue growth, supporting ongoing momentum.

Valuation metrics show a higher P/E (50.8), but this is reasonable given UI’s growth path and industry-leading margins.

Looking Deeper

For investors searching for other high-growth options, the Little Book screener lists more stocks meeting Navellier’s criteria.

Disclaimer: This review is for information only and is not investment advice. Investors should do their own research or consult a financial advisor before making decisions.