Is Hennes & Mauritz (HNNMY) a Solid Growth Stock? 3 Reasons to Think "Yes"

Core Viewpoint - Investors are seeking growth stocks that can deliver above-average growth and exceptional returns, but identifying such stocks is challenging due to their 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 a company's real growth prospects beyond traditional metrics [2] - Hennes & Mauritz AB (HNNMY) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being a strong indicator of a company's potential [3] - Hennes & Mauritz has a historical EPS growth rate of 7.4%, but projected EPS growth for this year is 23.3%, significantly higher than the industry average of 17.1% [4] Group 3: Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for growth stocks, indicating how efficiently a company generates sales from its assets [5] - Hennes & Mauritz has an S/TA ratio of 1.35, outperforming the industry average of 1.34, indicating better efficiency in asset utilization [5] Group 4: Sales Growth - Sales growth is another critical factor, with Hennes & Mauritz expected to achieve an 8.3% sales growth this year, compared to the industry average of 3.9% [6] Group 5: Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements, making this a valuable metric for investors [7] - Hennes & Mauritz has seen a 5.7% increase in current-year earnings estimates over the past month, indicating positive momentum [8] Group 6: Overall Positioning - Hennes & Mauritz holds a Zacks Rank of 2 and a Growth Score of A, positioning it well for potential outperformance in the market [10]