Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates can be challenging due to inherent volatility and risks [1] Group 1: Company Overview - Central Garden (CENTA) is highlighted as a recommended growth stock based on the Zacks Growth Style Score, which evaluates a company's genuine growth potential beyond traditional metrics [2] - The company currently holds a favorable Growth Score and a top Zacks Rank, indicating strong investment potential [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable as it signals strong future prospects [4] - Central Garden's projected EPS growth for the current year is 11.3%, significantly outperforming the industry average of 3.2% [5] Group 3: Cash Flow Growth - High cash flow growth is essential for growth-oriented companies, allowing them to fund new projects without relying on external financing [6] - Central Garden's year-over-year cash flow growth stands at 8.7%, exceeding the industry average of 4.5% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 11.4%, compared to the industry average of 9.3% [7] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are indicative of potential stock price movements [8] - The current-year earnings estimates for Central Garden have been revised upward, with the Zacks Consensus Estimate increasing by 0.1% over the past month [8] Group 5: Conclusion - Central Garden has achieved a Growth Score of B and a Zacks Rank of 2, reflecting positive earnings estimate revisions and strong growth metrics [9] - This combination positions Central Garden as a potential outperformer and a solid choice for growth investors [10]
Is Central Garden (CENTA) a Solid Growth Stock? 3 Reasons to Think "Yes"