3 Reasons Why Palomar (PLMR) Is a Great Growth Stock

Core Viewpoint - Growth investors are interested in stocks with above-average financial growth, but identifying such stocks can be challenging due to inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score simplifies the process of finding promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Palomar (PLMR) is currently recommended due to its favorable Growth Score and 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 [4] - Palomar's historical EPS growth rate is 54%, with projected EPS growth of 36.1% this year, significantly outperforming the industry average of 3% [5] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, enabling them to expand without relying on external funding [6] - Palomar's year-over-year cash flow growth is 45.1%, exceeding the industry average of 15.6% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 25.5%, compared to the industry average of 11.6% [7] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements [8] - The current-year earnings estimates for Palomar have increased by 3.2% over the past month [8] Group 5: Overall Positioning - Palomar has achieved a Growth Score of B and a Zacks Rank 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [10]