Looking for a Growth Stock? 3 Reasons Why ScanSource (SCSC) is a Solid Choice

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: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - ScanSource (SCSC) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly attractive [3] - ScanSource's historical EPS growth rate is 6.6%, but projected EPS growth for this year is 15.5%, surpassing the industry average of 13.9% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important indicator of efficiency in growth investing [5] - ScanSource's S/TA ratio is 1.73, indicating it generates $1.73 in sales for every dollar in assets, compared to the industry average of 0.93 [5] Group 4: Sales Growth - Sales growth is another key metric, with ScanSource expected to achieve a 3.9% sales growth this year, outpacing the industry average of 2.5% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements [7] - Current-year earnings estimates for ScanSource have been revised upward, with a 3.9% increase in the Zacks Consensus Estimate over the past month [8] Group 6: Overall Assessment - ScanSource has earned a Growth Score of B and a Zacks Rank 2 due to positive earnings estimate revisions, indicating it is a solid choice for growth investors [10]