In growth stock investing, it is important to search for companies that have strong and well-rounded growth characteristics. The first step to success lies in finding industries that have a promising outlook. Then, you’ll want to find companies within those industries that have had strong historical sales growth.
Of course, you don’t want the momentum to stop, so check to see what the company’s future sales growth looks like. Narrow down your list by finding firms who have a history of surpassing quarterly earnings expectations.
We have found three reliable tech stocks who meet the requirements of the criteria stated above.
They are high flyers, and all of these companies have seen their stock price shoot up by over 40% in the last three months.
Tech Stocks Posting Massive Price Growth: Arista Networks Inc (ANET)
Arista Networks Inc (ANET) provides cloud networking solutions for datacenter and cloud computing environments, and its clients include Internet companies, financial services organizations, government agencies, and media and entertainment companies. It also offers products such as Ethernet switches, pass-through cards, transceivers, and enhanced operating systems. ANET stock is a Zacks Rank #3 (Hold) and it has a market cap of $5.93 billion.
Arista operates in the communications components industry, which lies in the top 37% of all 265 industries ranked by Zacks. Companies within the top half of all ranked industries tend to outperform the lower half of industries by a wide margin. Arista’s sales grew by 43.5% last year, and since 2013, annual revenues have more than doubled. For the current fiscal year, sales are forecasted to increase by 31.2%.
Like its top line, Arista’s bottom line has also seen impressive growth over the years, with net income growing by 188% since 2013. ANET has an impressive trailing twelve month net margin of 15%, and its EPS is projected to grow by 19.4% this year. The company has beaten our EPS estimate in each of the last four quarters, beating by an average of 14.85% per quarter over that time span.
Tech Stocks Posting Massive Price Growth: Inphi Corporation (IPHI)
Inphi Corporation (IPHI) is a provider of fables high-speed analog semiconductor solutions for the communications and computing markets. The company’s products are designed into systems sold by original equipment manufacturers such as Cisco Systems, Inc. (CSCO), Dell Inc., and HP Inc (HPQ). IPHI is a Zacks Rank #2 (Buy) and it has a market cap of $1.65 billion.
Inphi is in the semi-analog & mixed-signal IC industry, which lies in the top 40% of all ranked industries. The corporation’s sales grew by 58% last year, and they have blown up by 171% since 2012. Revenues are projected to increase by about 10% this year. Inphi’s gross margin improved last year, going from 55% to 60%. It seeks to become more profitable, as EPS is forecasted to grow by 98%. Our current year EPS consensus estimate has improved over the last 60 days, going from 54 cents per share to 75 cents per share.
Like Arista, Inphi has beaten our EPS estimate in each of the last four quarters, beating by an average of 58.3% per quarter. It is expected to release the results from its next quarterly report in late October.
Tech Stocks Posting Massive Price Growth: NetEase Inc (ADR) (NTES)
NetEase Inc (ADR) (NTES) develops applications, services, and other technologies for the Internet in China. It offers online gaming services that are developed in-house. It also provides online advertising, community services, entertainment content, and e-mail services. NetEase is a Zacks Rank #1 (Strong Buy) and it has a market cap of $32 billion.
NetEase belongs to the Internet software and services industry, which is in the top 27% of all industries ranked by Zacks. Remember, stocks in the top half of all ranked industries outperform their lower ranked peers by a significant margin. Last year, sales grew by 86% to $3.52 billion. This year’s growth is pretty ambitious as well, with revenues projected to increase by 55.6%. Last year, NTES’s net income grew by 36%. Significant EPS growth is expected to be realized again, with EPS estimated to shoot up by 52% this fiscal year.
NetEase has surpassed our consensus estimate in each of the last four quarters, and it posted an average quarterly beat of 28.3% in that time frame.
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