Ubiquiti Inc (NYSE:UI) Displays Strong Financial Momentum Across Eight Key Growth Measures

A stock screening method from Louis Navellier's "The Little Book That Makes You Rich" uses eight fundamental growth measures to find companies with better financial momentum. This plan concentrates on firms showing positive earnings estimate changes, steady earnings beats, speeding sales growth, widening operating margins, good cash flow creation, solid earnings growth, positive earnings speed, and high returns on equity. The method aims to find businesses in a period of speeding financial performance before the wider market completely sees their growth possibility.

Earnings Estimate Changes and Beats

Ubiquiti Inc (NYSE:UI) shows notable strength in analyst forecasts and earnings results. The company has displayed notable upward changes in earnings estimates, with analysts raising their next-quarter EPS forecasts by 38.6% over the last three months. This large change shows increasing confidence among financial analysts about Ubiquiti's short-term earnings. Furthermore, the company has regularly beaten forecasts, reporting positive earnings beats in all of the last four quarterly reports with an average beat of 33.2%. These regular beats indicate management successfully directs analyst forecasts while performing above those estimates.

Income and Sales Speed

The company's top-line growth shows a clear image of business growth:

• Year-over-year income growth of 33.4%
• Quarter-over-quarter sales growth of 49.6%
• These numbers greatly pass the screening limits of 20% for both groups

This speeding income pattern shows Ubiquiti is getting market share and effectively selling its networking technology products across enterprise, service provider, and consumer markets. The large quarter-over-quarter growth especially indicates speed is increasing rather than decreasing.

Earnings Ability and Operational Performance

Ubiquiti's operational results show impressive margin widening and cash flow creation. The company reached a 25.7% growth in operating margin over the past year, greatly passing the 2% screening need. This margin widening shows the company's capacity to grow income while managing costs, leading to better operational scale. Likewise, free cash flow growth of 18.5% passes the 15% screening limit, showing the company is turning its accounting profits into real cash that can be put back into the business or given to shareholders.

Earnings Growth and Speed

The bottom-line results show even more notable strength:

• Year-over-year EPS growth of 86.7%
• Quarter-over-quarter EPS growth of 103.4%
• Both numbers greatly pass the 15% screening needs

The earnings speed is especially notable, with current quarterly EPS growth of 103.4% greatly exceeding the 0.6% growth from the similar quarter one year before. This speeding pattern matches well with Navellier's focus on finding companies where earnings growth is speeding up rather than just continuing its rate.

Return on Equity and Financial State

Ubiquiti gives notable returns to shareholders with a large 106.5% return on equity, far passing the 10% screening limit. This very high ROE shows highly effective use of shareholder money and indicates the business works with important competitive strengths in its networking equipment markets. The company's fundamental study report shows more strengths including very good earnings ability scores, good financial state, and no existing debt, although it trades at high valuation multiples that show its growth outlook.

Fundamental Study Summary

According to ChartMill's detailed fundamental study, Ubiquiti gets an overall score of 6 out of 10, with especially good scores in earnings ability (8/10) and financial state (8/10). The company is strong in return measures with ROA of 48.6%, ROE of 106.5%, and ROIC of 94.6%, all placing in the top parts of the communications equipment industry. While valuation stays high with P/E ratios above market averages, the company's very good earnings ability and growth features help support these multiples for growth-focused investors.

Screening Method and Other Possibilities

The screening plan based on Navellier's method successfully found Ubiquiti as meeting all eight growth measures, indicating the company displays the full financial momentum wanted by growth investors. For investors looking to find other companies that meet these strict growth measures, the full screening results give a beginning point for more study into companies showing similar growth features across different market areas.

Disclaimer: This article presents factual information about Ubiquiti Inc's financial performance and its alignment with a specific screening methodology but does not constitute investment advice. Investors should conduct their own research and consider their individual financial circumstances before making investment decisions.