Victory Capital (NASDAQ:VCTR): A Prime Example of Affordable Growth

Among the different investment strategies available to market participants, the search for growth at a reasonable price, often called "affordable growth", stays a popular method for investors looking to balance opportunity with caution. This method focuses on finding companies that show solid growth paths but trade at prices that do not completely show their future, offering a good balance of risk and reward. Such stocks usually mix strong basics, including good profitability and solid finances, with a good buying price, lowering possible loss while setting up for price gains. One security that recently came up through an affordable growth screen is VICTORY CAPITAL HOLDING - A (NASDAQ:VCTR), an asset management firm that seems to fit well with these standards.

A closer look at Victory Capital’s fundamental profile, as detailed in its fundamental analysis report, shows several positive points that make it a good candidate for this strategy. The company gets an overall fundamental rating of 7 out of 10, pointing to good basic business quality compared to others in the capital markets industry.

Growth and Valuation: A Rare Combination

Key to the affordable growth idea are two parts: solid growth and fair pricing. Victory Capital does well in both areas, with a growth rating of 8 and a valuation rating of 7. The company has shown notable speed, with revenue increasing by 20.9% over the past year and earnings per share growing at a yearly rate of 12.55% over recent years. More significantly, this path is expected to speed up; analysts forecast EPS growth of 16.06% and revenue growth of 20.68% each year in the near future. Such solid expansion is usually paired with high prices, yet Victory Capital shares remain fairly priced. With a forward P/E ratio of 10.31, well under the S&P 500 average of 22.78, and an enterprise value to EBITDA ratio that puts it lower than 87.82% of industry peers, the stock offers growth without high multiples. This match is key for the affordable growth strategy, as it helps prevent paying too much for future hopes while capturing companies that are growing.

Profitability and Financial Health: Supporting the Foundation

While growth and valuation are main factors, lasting affordable growth also relies on solid profitability and good financial health, points that lower business risk and improve staying power. Victory Capital scores an 8 for profitability, showing high-quality earnings and effective operations. Important measures include a return on invested capital of 9.26%, doing better than 84.87% of industry rivals, and an operating margin of 46.16%, which is higher than almost 80% of peers. These numbers indicate the company is not only growing but doing so with profit and efficiency.

Financial health, rated at 6, shows some small worries but general steadiness. The company keeps a fair debt-to-equity ratio of 0.39, showing average borrowing, and has been lowering both its debt-to-assets ratio and share count over time, a positive sign for money management. While cash levels are average and the Altman-Z score hints at some care, the wider ability to pay debts stays acceptable, backing the company’s capacity to maintain growth without high financial risk.

Conclusion and Further Research

Victory Capital is a notable example of a stock that mixes speeding growth, good pricing, high profitability, and enough financial health, core features wanted by investors using an affordable growth strategy. Its fundamental profile suggests a company that is not only growing quickly but also trading at a lower price relative to its future and industry measures.

For investors curious about finding similar chances, more results from the affordable growth screen can be found here. This preset screen looks for stocks with growth ratings over 7, valuation scores over 5, and acceptable ratings in health and profitability, helping to find other choices that may suit this investment method.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and consider their individual financial circumstances before making any investment decisions.