SM Energy(SM) ZACKS·2025-02-24 18:45Core Viewpoint - Growth investors are focused on stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent volatility and risks [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score simplifies the process of finding promising growth stocks by analyzing a company's real growth prospects beyond traditional metrics [2] - SM Energy (SM) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for growth investors, with double-digit growth being highly desirable as it indicates strong future prospects [3] - SM Energy has a historical EPS growth rate of 49.5%, with projected EPS growth of 20.3% this year, significantly surpassing the industry average of 12.2% [4] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, allowing them to expand without relying on external funding [5] - SM Energy's year-over-year cash flow growth is 14.5%, compared to an industry average of -11.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 15.4%, exceeding the industry average of 10.4% [6] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements, making them an important consideration for investors [7] - SM Energy has seen a 7.4% increase in current-year earnings estimates over the past month [7] Group 5: Overall Positioning - SM Energy has achieved a Growth Score of B and a Zacks Rank 1 due to positive earnings estimate revisions, positioning it well for potential outperformance [9]