3 S&P 500 Earnings Growth Stocks to Buy in 2025: CMG, RMD, NOW
The S&P 500 is expected to rise in 2025 due to Donald Trump’s growth plans, the Fed’s rate policies, and a strong U.S. economy. Thus, investors should seize the positive trend by placing bets on the S&P 500 stocks, such as Chipotle Mexican Grill, Inc. CMG, ResMed Inc. RMD and ServiceNow, Inc. NOW since they exhibit superb earnings growth.
Earnings are considered the most important variable influencing the share price. After all, if the company doesn’t make money, it won’t survive. But, expectations of earnings also play a striking role.
Frequently, we have seen a decline in the stock price despite earnings growth and a rally in price following an earnings decline. This is largely the result of a company’s earnings failing to meet market expectations.
Earnings estimates embody analysts’ opinions on factors such as sales growth, product demand, competitive industry environment, profit margins, and cost control. Thus, earnings estimates serve as a valuable tool, while making investment decisions. Earnings estimates also help analysts assess the cash flow to determine the fair value of a firm.
Thus, investors should watch for stocks ready to make a big move. Hence, investors need to buy stocks with historical earnings growth and are seeing a rise in quarterly and annual earnings estimates.
We use that basis to determine our stock selections using Zack’s Research Wizard Tool.
To shortlist stocks that have striking earnings growth and positive estimate revisions, we have added the following parameters:
Zacks Rank less than or equal to 2 (Only Zacks’ ‘Buys’ and ‘Strong Buys’ are allowed. With the Zacks Rank proving itself to be one of the best rating systems out there, this is a great way to start things off.)
5-Year Historical EPS Growth (%) greater than X-Industry (stocks with a strong EPS growth history).
% Change EPS F(0)/F(-1) greater than or equal to 5 (companies that saw year-over-year earnings growth of 5% or more in the last reported fiscal).
% Change Q1 Estimates over the last 4 weeks greater than zero (stocks that have seen their current quarter earnings estimates revised higher in the last 4 weeks).
% Change F1 Estimates over the last 1 week greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 1 week).
% Change F1 Estimates over the last 4 weeks greater than zero (stocks that have seen their annual earnings estimates revised higher in the last 4 weeks).
