This refresh
Data-driven refresh June 26, 2026. The Top Picks are the Bull Rankings quality-growth screen — strong, growing businesses with durable returns at a fair price (PEG / EV-EBIT vs sector, ROIC, free cash flow), ranked across a 5224-ticker universe covering every US-listed common stock on NYSE, NASDAQ, NYSE American, and NYSE Arca (2562 passed the market-cap / liquidity screen; financials route to a separate card). Fundamentals from Yahoo Finance quoteSummary reconciled with as-reported SEC EDGAR filings; narrative authored by Groq (with Gemini and data-driven fallbacks).
Top Picks — quality compounders at a fair price
1. INCY — Incyte Corporation · score 90.5
Biotechnology · price $107.53 · 1Y $110.26 · 5Y $161.43 · 10Y $239.47
FCF $1.4b C+ · Rev +21.2% A- · D/E 0.01 A · P/E 15.2x A- · PEG 0.36 A
Why now. The bull case for Incyte Corporation rests on its ability to compound growth through its robust product line, particularly JAKAFI, which treats myelofibrosis and polycythemia vera, driving a 21.2% revenue growth rate. With a peg ratio of 0.36, indicating undervaluation relative to growth, and a profit margin of 26.7%, the company demonstrates its ability to maintain profitability while expanding. The crux of this thesis is the persistence of this growth, fueled by the continued demand for its treatments and its strong financials.
Moat. Incyte's durable edge is rooted in its proprietary therapeutics, such as JAKAFI and ICLUSIG, which offer unique treatment options for patients with specific diseases. The company's 25.5% ROE can be attributed to its pricing power, stemming from its category leadership in treating conditions like myelofibrosis and chronic myeloid leukemia. This advantage is difficult for competitors to replicate quickly, given the complexity and specificity of these treatments.
Risk. The bear case against Incyte Corporation centers on its dependence on a few key products and the potential for increased competition in the biopharmaceutical space. With a debt to equity ratio of 0.01, the company has a clean balance sheet, but its beta of 0.79 suggests it is less volatile than the market, which might not fully capture the risk of disruption in its core markets. A significant threat would be the emergence of a substitute treatment for myelofibrosis or polycythemia vera, which could erode JAKAFI's market share and challenge the bull thesis.
Horizon. 1-3 yr $110.26 (analyst consensus (n=23)) — fundamentals + valuation re-rating. 5 yr $161.43 at ~8% CAGR — compounding case rests on the competitive position widening. 10 yr $239.47 if current growth sustains into durable earnings power.
2. DOCS — Doximity, Inc. · score 90.4
Health Information Services · price $19.85 · 1Y $25.42 · 5Y $37.22 · 10Y $55.21
FCF $326m C · Rev +13.1% B+ · D/E 0.01 A- · P/E 20.3x B+ · PEG 0.59 A-
Why now. Doximity's compounding growth rests on its ability to leverage the Doximity platform, specifically the personalized newsfeed and workflow tools like Ask and Scribe, to drive 13.1% revenue growth and $326m in free cash flow, all while maintaining a 20.6% return on equity and a 0.59 PEG ratio, which suggests the growth is undervalued. This thesis hinges on the persistence of 30.4% profit margins, which underpin the free cash flow generation. The crux is whether Doximity can continue to expand its platform's utility for medical professionals without compromising these margins.
Moat. Doximity's durable edge stems from its HIPAA-compliant AI assistant, Ask, and its clinical discussions feature, which create a network effect among medical professionals. The 20.6% return on equity is attributed to pricing power from category leadership in providing a unique blend of clinical content and workflow tools. Competitors would struggle to replicate this specific combination of features and compliance, protecting Doximity's market position.
Risk. The bear case against Doximity centers on the potential for decelerating revenue growth, as evidenced by the 13.1% growth rate being lower than historical highs, and the risk that competitors could develop similar platforms, eroding Doximity's 30.4% profit margins. The 1.29 beta indicates a higher volatility, which could exacerbate any downturn. A concrete signal confirming the bear case would be a significant decline in revenue growth or a failure to maintain current profit margins, breaking the bull thesis.
Horizon. 1-3 yr $25.42 (analyst consensus (n=19)) — fundamentals + valuation re-rating. 5 yr $37.22 at ~13% CAGR — compounding case rests on the competitive position widening. 10 yr $55.21 if current growth sustains into durable earnings power.
3. INTU — Intuit Inc. · score 89.8
Software - Application · price $255.07 · 1Y $488.17 · 5Y $714.73 · 10Y $1,060
FCF $7.8b B+ · Rev +15.6% B+ · D/E 0.33 B · P/E 15.6x A- · PEG 0.68 A-
Why now. The bull case for Intuit Inc. rests on its ability to compound growth through its Global Business Solutions segment, particularly via QuickBooks services, which have driven a 15.6% revenue growth rate and a 21.9% profit margin. With a $7.8b free cash flow and a 0.68 PEG ratio, Intuit is well-positioned to sustain this growth. The crux of this thesis is the persistence of this growth, driven by the stickiness of its financial management and payments services for small and mid-market businesses.
Moat. Intuit's durable edge stems from its category leadership in financial management and payments, particularly through QuickBooks, which creates a network effect and switching costs for its customers. The 22.2% ROE is a testament to the pricing power derived from this leadership, making it difficult for competitors to replicate. This advantage is further reinforced by the company's investments in marketing automation and customer relationship management through Mailchimp.
Risk. The bear case against Intuit centers on its valuation, with a 15.6 P/E ratio that may be elevated given the current market conditions. Additionally, the company's debt-to-equity ratio of 0.33 and beta of 0.96 indicate some level of financial and market risk. A confirmation of the bear case would be a significant deceleration in revenue growth, potentially triggered by increased competition in the financial management and payments space, which could break the bull thesis.
Horizon. 1-3 yr $488.17 (analyst consensus (n=32)) — fundamentals + valuation re-rating. 5 yr $714.73 at ~23% CAGR — compounding case rests on the competitive position widening. 10 yr $1,060 if current growth sustains into durable earnings power.
4. ADBE — Adobe Inc. · score 89.7
Software - Application · price $193.41 · 1Y $282.27 · 5Y $413.27 · 10Y $613.06
FCF $10.3b A- · Rev +10.5% B · D/E 0.61 C+ · P/E 11.1x A · PEG 0.54 A-
Why now. The bull case for ADBE rests on its ability to compound growth through its Digital Media segment, which serves a wide range of customers from photographers to knowledge workers, with a 10.5% revenue growth rate and a 28.7% profit margin, driven by its integrated platform and products that enable brands and businesses to create, manage, and optimize customer experiences, all while maintaining a 0.54 PEG ratio, indicating undervaluation relative to its growth prospects.
Moat. Adobe's durable edge stems from its Digital Experience segment, which provides an integrated platform for customer experience management, creating a high switching cost for its clients due to the complexity and depth of its offerings, further reinforced by its 62.8% ROE, driven by pricing power from category leadership in digital media and customer experience management.
Risk. The bear case against ADBE is centered on its high 1.4 beta, indicating volatility, and a 0.61 debt-to-equity ratio, which, although not alarming, could become a concern if interest rates rise significantly, potentially impacting its ability to service debt and maintain its current level of investment in growth initiatives, a scenario that would be confirmed if the company's 10.3B FCF starts to decline.
Horizon. 1-3 yr $282.27 (analyst consensus (n=32)) — fundamentals + valuation re-rating. 5 yr $413.27 at ~16% CAGR — compounding case rests on the competitive position widening. 10 yr $613.06 if current growth sustains into durable earnings power.
5. LRN — Stride, Inc. · score 89.3
Education & Training Services · price $86.11 · 1Y $99.03 · 5Y $144.98 · 10Y $215.07
FCF $414m C · Rev +17.9% B+ · D/E 0.33 A- · P/E 13.5x A- · PEG 0.48 A
Why now. The bull case for LRN rests on its ability to compound growth through its proprietary online curriculum and software systems, with a 17.9% revenue growth rate and a 13.5 P/E ratio, indicating an attractive valuation for a growth company, and a 0.48 PEG ratio suggesting the growth is undervalued. This growth is driven by its technology-based products and services that enable clients to support individualized learning for students. The crux of this thesis is that LRN can maintain its growth trajectory, driven by its integrated package of systems, services, and products for virtual or blended public schools.
Moat. LRN's durable edge comes from its proprietary online curriculum and software systems, which provide a cost advantage and high switching costs for its clients, contributing to its 18.8% ROE. The company's technology-based products and services also create a network effect, as more clients and students use its systems, making it more attractive to new clients and students. This moat is further reinforced by its expertise in supporting individualized learning, making it difficult for competitors to replicate its offerings.
Risk. The bear case for LRN is that its growth may decelerate due to increasing competition in the online education market, with a 0.33 debt-to-equity ratio indicating some financial leverage, and a 12.2% profit margin that may be at risk if competition increases. If LRN's revenue growth rate were to slow significantly, its valuation multiples may contract, confirming the bear case and breaking the bull thesis. A concrete signal of this would be a decline in its 17.9% revenue growth rate or a decrease in its 18.8% ROE.
Horizon. 1-3 yr $99.03 (structural (no analyst coverage)) — fundamentals + valuation re-rating. 5 yr $144.98 at ~11% CAGR — compounding case rests on the competitive position widening. 10 yr $215.07 if current growth sustains into durable earnings power.
6. PCTY — Paylocity Holding Corporation · score 89.1
Software - Application · price $100.48 · 1Y $154.16 · 5Y $225.70 · 10Y $334.81
FCF $487m C · Rev +14.8% B+ · D/E 0.11 B+ · P/E 21.5x B+ · PEG 0.82 B+
Why now. The bull case for PCTY rests on its ability to compound growth through its cloud-based human capital management and payroll software solutions, with a 14.8% revenue growth rate and $487m in free cash flow, driven by its payroll and time and attendance solutions, all while maintaining a 16.1% profit margin. This growth is further supported by its 0.82 PEG ratio, indicating the stock's price is reasonable given its growth prospects. The crux of this thesis is that PCTY can sustain its growth rate, driven by its expanding customer base and increasing demand for cloud-based HR solutions.
Moat. PCTY's durable edge is its comprehensive suite of HR and payroll solutions, including time and attendance, scheduling, and talent management, which creates a high switching cost for its customers. Additionally, its 21.9% ROE is a testament to its pricing power, driven by its category leadership in cloud-based HR and payroll solutions. This moat is further reinforced by its low 0.11 debt-to-equity ratio, providing the company with the financial flexibility to invest in its products and services.
Risk. The bear case for PCTY is that its high 21.5 P/E ratio and 3.4 P/S ratio may be unsustainable, particularly if the company's revenue growth rate decelerates. Furthermore, its 0.51 beta indicates that the stock may be more volatile than the broader market, making it more susceptible to market downturns. A concrete signal that would confirm the bear case is a significant decline in PCTY's revenue growth rate or a contraction in its profit margins.
Horizon. 1-3 yr $154.16 (analyst consensus (n=19)) — fundamentals + valuation re-rating. 5 yr $225.70 at ~18% CAGR — compounding case rests on the competitive position widening. 10 yr $334.81 if current growth sustains into durable earnings power.
7. ADMA — ADMA Biologics, Inc. · score 88.9
Biotechnology · price $8.72 · 1Y $17.60 · 5Y $25.77 · 10Y $38.23
FCF $108m C · Rev +19.6% B+ · D/E 1.11 C · P/E 12.8x A- · PEG n/a
Why now. The bull case for ADMA Biologics, Inc. rests on its ability to compound growth through its specialty plasma-derived biologics, specifically driven by products like BIVIGAM and ASCENIV, with a 19.6% revenue growth rate, a 32.4% profit margin, and a $108m free cash flow, all of which position the company for sustained expansion. This growth trajectory, combined with a 12.8 P/E ratio, suggests that ADMA is undervalued given its growth prospects. The crux of this thesis is the company's ability to maintain its profit margin while continuing to grow revenue, which hinges on the success of its plasma-derived biologics portfolio.
Moat. ADMA's durable edge stems from its portfolio of specialty plasma-derived biologics, including BIVIGAM and ASCENIV, which treat primary humoral immunodeficiency and other conditions. The company's 42.4% ROE can be attributed to its pricing power, derived from category leadership in these niche markets, making it difficult for competitors to quickly replicate ADMA's position. Additionally, the high barriers to entry in plasma-derived biologics, due to stringent regulatory requirements and the need for significant investment in manufacturing and quality control, further protect ADMA's market share.
Risk. The bear case against ADMA centers on its debt-to-equity ratio of 1.11, which, although manageable, could become a concern if the company faces significant headwinds in its end markets or if there's a substantial increase in competition that erodes its pricing power. A concrete signal that would confirm the bear case is a decline in ADMA's profit margin, indicating that the company is losing its pricing power or facing increased competition. This could be triggered by the entry of new, more affordable treatments for the conditions ADMA's products address, or by regulatory changes that affect the plasma-derived biologics market.
Horizon. 1-3 yr $17.60 (analyst consensus (n=5)) — fundamentals + valuation re-rating. 5 yr $25.77 at ~24% CAGR — compounding case rests on the competitive position widening. 10 yr $38.23 if current growth sustains into durable earnings power.
8. HRMY — Harmony Biosciences Holdings, Inc. · score 87.9
Biotechnology · price $34.13 · 1Y $44.36 · 5Y $64.95 · 10Y $96.35
FCF $342m C · Rev +21.5% A- · D/E 0.18 B+ · P/E 13.8x A- · PEG n/a
Why now. The bull case for HRMY rests on its ability to compound growth through its novel mechanism of action for the treatment of excessive daytime sleepiness in adult patients with narcolepsy, driven by WAKIX (pitolisant), with a 21.5% revenue growth rate and a 16.2% profit margin, all while maintaining a 0.18 debt-to-equity ratio, setting it up for persistent growth.
Moat. Harmony Biosciences' durable edge stems from its WAKIX (pitolisant) product line, which has a novel mechanism of action, providing a 16% ROE through pricing power from category leadership in treating rare neurological diseases, a competitive advantage that is difficult for others to replicate quickly.
Risk. The bear case against HRMY is led by the risk of debt-to-equity ratio creeping up, potentially signaling over-leveraging, and a beta of 0.97 indicating market sensitivity, which could confirm the bear case if the company fails to maintain its revenue growth trajectory, particularly if revenue growth starts to decelerate significantly.
Horizon. 1-3 yr $44.36 (analyst consensus (n=11)) — fundamentals + valuation re-rating. 5 yr $64.95 at ~14% CAGR — compounding case rests on the competitive position widening. 10 yr $96.35 if current growth sustains into durable earnings power.
9. NUTX — Nutex Health Inc. · score 87.3
Medical Care Facilities · price $149.10 · 1Y $235.50 · 5Y $344.80 · 10Y $511.48
FCF $269m C · Rev +82.4% A · D/E 0.79 C+ · P/E 10.9x A · PEG n/a
Why now. The bull case for NUTX rests on its ability to compound growth through its Population Health Management (PHM) segment, which provides management, administrative, and other support services to its affiliated hospitals and physician groups, with 82.4% revenue growth, a 10.9 P/E ratio, and $269m in free cash flow, all of which suggest a high-quality compounder with strong fundamentals. The crux of this thesis is that NUTX can maintain its 11% profit margin and 27.8% ROE, driven by its PHM segment, to drive long-term growth. The key to this persistence is the company's ability to leverage its micro hospitals, specialty hospitals, and hospital outpatient departments to drive revenue and profitability.
Moat. NUTX's durable edge comes from its network of micro hospitals, specialty hospitals, and hospital outpatient departments, which provide a cost advantage and allow for pricing power due to category leadership in healthcare services. The company's 27.8% ROE is driven by its ability to manage costs and maintain high margins, which is a result of its focused business model and efficient operations. This edge is protected by the high barriers to entry in the healthcare services industry, making it difficult for competitors to replicate NUTX's business model.
Risk. The bear case against NUTX is that its high debt-to-equity ratio of 0.79 and high beta of 2.06 make it vulnerable to economic downturns and interest rate changes. Additionally, the company's reliance on its PHM segment for growth and profitability makes it susceptible to changes in the healthcare regulatory environment. If NUTX's profit margin were to contract or its revenue growth were to slow, it could confirm the bear case and break the bull thesis.
Horizon. 1-3 yr $235.50 (analyst consensus (n=4)) — fundamentals + valuation re-rating. 5 yr $344.80 at ~18% CAGR — compounding case rests on the competitive position widening. 10 yr $511.48 if current growth sustains into durable earnings power.
10. NVDA — NVIDIA Corporation · score 86.4
Semiconductors · price $195.74 · 1Y $298.93 · 5Y $437.67 · 10Y $649.25
FCF $119.1b A · Rev +65.5% A · D/E 0.07 A- · P/E 30.0x B · PEG 0.61 A-
Why now. NVIDIA Corporation's dominant position in the data center scale AI infrastructure market, particularly through its Compute & Networking segment, positions it for sustained growth, driven by its 65.5% revenue growth rate, 63% profit margin, and 81.7% return on equity, making it an attractive investment opportunity. The company's ability to compound growth through its high-margin data center business, coupled with its strong financials, supports the bull case. The crux of this thesis rests on the persistence of its 18.7 price-to-sales ratio, which, despite being high, is justified by its exceptional growth metrics.
Moat. NVIDIA's durable edge in the AI infrastructure market stems from its proprietary technology and software solutions, particularly in the Compute & Networking segment, which provides data center accelerated computing and networking platforms and artificial intelligence solutions. The company's 63% profit margin is a testament to its pricing power, driven by its category leadership in the data center market. Furthermore, its 0.07 debt-to-equity ratio indicates a healthy balance sheet, allowing it to invest in research and development and maintain its competitive advantage.
Risk. The primary risk to NVIDIA's growth story is the potential for a slowdown in the data center market, which could impact its revenue growth rate and, in turn, its valuation multiples. With a 30 price-to-earnings ratio and a 2.2 beta, the stock is sensitive to market volatility and may be vulnerable to a correction if growth expectations are not met. A concrete signal that would confirm the bear case would be a decline in the company's 65.5% revenue growth rate, indicating a loss of momentum in its core business.
Horizon. 1-3 yr $298.93 (analyst consensus (n=59)) — fundamentals + valuation re-rating. 5 yr $437.67 at ~17% CAGR — compounding case rests on the competitive position widening. 10 yr $649.25 if current growth sustains into durable earnings power.
11. EXLS — ExlService Holdings, Inc. · score 86.1
Information Technology Services · price $25.22 · 1Y $41.75 · 5Y $61.13 · 10Y $90.68
FCF $297m C · Rev +13.6% B+ · D/E 0.67 C+ · P/E 16.1x A- · PEG 0.84 B+
Why now. The bull case for EXLS rests on its ability to compound growth through its digital operations and solutions and analytics-driven services, particularly in the Insurance and Healthcare and Life Sciences segments, with a 13.6% revenue growth rate, a 16.1 P/E ratio, and a 0.84 PEG ratio, all of which suggest a strong and sustainable growth trajectory, and it all hinges on the company's ability to maintain its 11.7% profit margin
Moat. EXLS's durable edge comes from its expertise in claims management, premium and benefit administration, and actuarial and risk analytics, which creates a switching cost for its clients and allows the company to maintain its 32.3% ROE through pricing power, and its data and artificial intelligence capabilities provide a cost advantage that competitors can't quickly replicate
Risk. The bear case against EXLS is that its 0.67 debt-to-equity ratio and 0.82 beta indicate a potential vulnerability to economic downturns, and if the company's revenue growth decelerates, its 16.1 P/E ratio may be difficult to sustain, which would confirm the bear case and break the bull thesis if the company's profit margin begins to contract
Horizon. 1-3 yr $41.75 (analyst consensus (n=8)) — fundamentals + valuation re-rating. 5 yr $61.13 at ~19% CAGR — compounding case rests on the competitive position widening. 10 yr $90.68 if current growth sustains into durable earnings power.
12. FISV — Fiserv, Inc. · score 85.3
Sector n/a · price $47.53 · 1Y $70.00 · 5Y $102.49 · 10Y $152.03
FCF $4.1b B · Rev +9.3% B · D/E n/a · P/E 8.1x A- · PEG n/a
Why now. Fiserv's 9.3% revenue growth rate, coupled with a 19.7% profit margin and $4.1B in free cash flow, positions the company for sustained compounding, driven by its core growth segments. This growth trajectory, combined with a 12.2% return on equity, underscores the persistence of Fiserv's compounding potential. The crux of this thesis rests on the company's ability to maintain its revenue growth momentum, which is critical for sustaining the bull case.
Moat. Fiserv's durable edge is rooted in its ability to generate a 19.7% profit margin, which is a testament to its pricing power and operational efficiency. This margin is protected by the company's significant scale and its position in the payments and financial services sector, making it challenging for competitors to replicate. The high return on equity of 12.2% further reinforces the notion that Fiserv has a durable competitive advantage, driven by its strong market position and efficient operations.
Risk. The bear case against Fiserv is centered around the company's current valuation, with a week 52 low of $47.04 and a week 52 high of $175.92, indicating significant price volatility. Additionally, the analyst consensus recommendation of hold and the mean recommendation of 2.65 suggest that there may be concerns about the company's growth prospects or valuation. A concrete signal that would confirm the bear case is if Fiserv's revenue growth rate were to decelerate significantly, failing to meet the expected 9.3% growth rate, which would undermine the bull thesis.
Horizon. 1-3 yr $70.00 (analyst consensus (n=26)) — fundamentals + valuation re-rating. 5 yr $102.49 at ~17% CAGR — compounding case rests on the competitive position widening. 10 yr $152.03 if current growth sustains into durable earnings power.
13. CARG — CarGurus, Inc. · score 84.8
Auto & Truck Dealerships · price $31.03 · 1Y $37.38 · 5Y $54.73 · 10Y $81.20
FCF $293m C · Rev +13.7% B+ · D/E 0.79 B · P/E 16.3x B+ · PEG 0.95 B+
Why now. The bull case for CarGurus, Inc. rests on its ability to compound growth through its online automotive platform, specifically the Digital Deal and Dealership Mode products, which are driving a 13.7% revenue growth rate and a 15.9% profit margin, with a $293m free cash flow that underpins its 16.3 P/E ratio, all of which hinges on the company's capacity to maintain its network effect and pricing power in the automotive marketplace.
Moat. CarGurus' durable edge stems from its extensive network of dealers and car shoppers, which creates a self-reinforcing cycle that makes it harder for competitors to replicate, particularly given its 62.9% ROE, driven by pricing power from category leadership in the online automotive space, and its ability to offer an integrated suite of products that anchors its marketplace, making it difficult for competitors to quickly copy its business model.
Risk. The bear case against CarGurus centers on its 1.21 beta and 0.79 debt-to-equity ratio, which could exacerbate any downturn in the automotive market, particularly if revenue growth decelerates or if the company fails to maintain its profit margins, with a concrete signal of trouble being a decline in its $2.8b market cap or a failure to meet its $37.38 analyst consensus 1-yr target, which would undermine the bull thesis.
Horizon. 1-3 yr $37.38 (analyst consensus (n=13)) — fundamentals + valuation re-rating. 5 yr $54.73 at ~12% CAGR — compounding case rests on the competitive position widening. 10 yr $81.20 if current growth sustains into durable earnings power.
14. IT — Gartner, Inc. · score 84.3
Information Technology Services · price $126.63 · 1Y $165.00 · 5Y $241.58 · 10Y $358.36
FCF $1.3b C+ · Rev +3.7% C+ · D/E n/a · P/E 12.5x A- · PEG 0.53 A-
Why now. The bull case for Gartner, Inc. rests on its ability to compound growth through its Insights segment, which delivers 11.4% profit margins and has a $1.3b free cash flow, driven by its subscription services and access to a network of business and technology experts, with a 3.7% revenue growth rate that persists despite market fluctuations, all of which hinges on the durability of its research and consulting offerings.
Moat. Gartner's moat is rooted in its Conferences segment, which offers a unique opportunity for executives and teams to learn, share, and network, creating a network effect that reinforces its position as a leading provider of business and technology insights, with a 0.93 beta indicating a relatively stable stock performance, and its 12.5 P/E ratio suggesting a reasonable valuation for its growth prospects.
Risk. The bear case against Gartner, Inc. centers on its hold analyst recommendation, with a 2.73 mean recommendation score, indicating a potential lack of upside, and its 124.25 52-week low, which could be revisited if the company's revenue growth decelerates or its profit margins contract, a scenario that would be confirmed if the stock price breaks below its 126.63 current price.
Horizon. 1-3 yr $165.00 (analyst consensus (n=13)) — fundamentals + valuation re-rating. 5 yr $241.58 at ~14% CAGR — compounding case rests on the competitive position widening. 10 yr $358.36 if current growth sustains into durable earnings power.
15. EPAM — EPAM Systems, Inc. · score 83.7
Information Technology Services · price $77.37 · 1Y $144.06 · 5Y $210.91 · 10Y $312.87
FCF $544m C+ · Rev +15.4% B+ · D/E 0.08 B+ · P/E 11.1x A · PEG 0.40 A
Why now. EPAM's deep specialization in digital platform engineering and software development services, particularly in high-demand areas like cloud, data, analytics, and AI, positions it for sustained growth. The company's exceptional efficiency is evident in its 0.4 PEG ratio and a robust $544m in TTM free cash flow against a modest $4.0b market cap, indicating significant undervaluation relative to its 15.4% FY YoY revenue growth. This combination of strong growth in critical technology segments and impressive cash generation suggests a compounding engine driven by ongoing enterprise digital transformation.
Moat. EPAM's moat stems from the mission-critical nature and complexity of its digital platform engineering and software development services, creating high switching costs for clients. Its expertise in integrating diverse services like cloud technologies, data, analytics, artificial intelligence, and cybersecurity builds deep client relationships, making it difficult for competitors to replicate the tailored solutions and embedded operational knowledge. This comprehensive, integrated approach to complex digital transformation projects ensures recurring business and sticky client engagements.
Risk. The primary risk for EPAM lies in its exposure to discretionary IT spending, particularly in its core digital platform engineering and software development services, which can be highly sensitive to economic downturns and competitive pressures from lower-cost providers. Despite a low P/E of 11.1, the stock's beta of 1.4 highlights its significant volatility and sensitivity to market sentiment, suggesting that any perceived slowdown in enterprise digital transformation could lead to further price declines from its 52-week high of $222.53. A sustained deceleration in its 15.4% FY YoY revenue growth would confirm the bear case, indicating a weakening demand environment for its premium services.
Horizon. 1-3 yr $144.06 (analyst consensus (n=18)) — fundamentals + valuation re-rating. 5 yr $210.91 at ~22% CAGR — compounding case rests on the competitive position widening. 10 yr $312.87 if current growth sustains into durable earnings power.
16. DXCM — DexCom, Inc. · score 83.5
Medical Devices · price $68.65 · 1Y $85.24 · 5Y $124.80 · 10Y $185.13
FCF $1.4b C+ · Rev +15.6% B+ · D/E 0.47 B · P/E 29.5x B · PEG 1.30 B
Why now. DexCom's strategic expansion into the broader metabolic health market, particularly with the Stelo biosensor targeting adults with prediabetes and Type 2 diabetes not on insulin, is the primary driver for sustained compounding. This initiative builds on existing momentum, evidenced by 15.6% FY YoY revenue growth, and is supported by robust $1.4b in free cash flow and a healthy 19.3% profit margin. The crux of the thesis is DexCom's ability to capture a significant share of this massive, underserved patient population, ensuring persistent growth beyond its traditional insulin-dependent market.
Moat. DexCom's durable edge stems from its proprietary continuous glucose monitoring (CGM) systems, including Dexcom G7 and G6, which create high switching costs for patients and healthcare providers through integrated remote monitoring via Dexcom Share and Follow applications. The company's exceptional 31.5% Return on Equity reflects its pricing power and efficient capital allocation, driven by specialized direct distribution channels to endocrinologists, physicians, and diabetologists, which fosters deep relationships and trust within the medical community for its advanced technology.
Risk. The primary bear case for DexCom centers on intensifying competition within the continuous glucose monitoring market, where new entrants or more cost-effective alternatives could erode market share and pricing power for products like Dexcom G7 and G6. This competitive pressure could significantly impact future growth, especially given the company's elevated P/E of 29.5, which prices in continued strong performance. A sustained deceleration in the 15.6% revenue growth rate or a marked decline in average selling prices for its core CGM systems would confirm the bear thesis.
Horizon. 1-3 yr $85.24 (analyst consensus (n=25)) — fundamentals + valuation re-rating. 5 yr $124.80 at ~13% CAGR — compounding case rests on the competitive position widening. 10 yr $185.13 if current growth sustains into durable earnings power.
17. VEEV — Veeva Systems Inc. · score 83.5
Health Information Services · price $158.08 · 1Y $244.59 · 5Y $358.11 · 10Y $531.23
FCF $1.7b C+ · Rev +16.3% B+ · D/E 0.01 A- · P/E 28.0x B · PEG 0.73 A-
Why now. Veeva Systems is a compelling growth story, deeply embedded in the life sciences industry with its specialized cloud software, particularly the Veeva Vault CRM Suite. The company's robust 16.3% FY YoY revenue growth, combined with a strong 28.4% profit margin and $1.7B in free cash flow, demonstrates its compounding power. The low 0.73 PEG ratio suggests this quality growth is currently undervalued, with the crux being the persistent demand for its mission-critical solutions within the pharmaceutical and biotechnology sectors.
Moat. Veeva's durable edge stems from the high switching costs inherent in its specialized cloud-based software, such as the Veeva Vault CRM Suite and Veeva PromoMats, which are deeply integrated into the operational workflows of pharmaceutical and biotechnology companies. These mission-critical solutions, spanning commercial, medical, and content management needs, create a sticky ecosystem that is difficult for competitors to dislodge. The extensive data solutions like Veeva OpenData further reinforce this moat by becoming the authoritative source for customer reference data within the life sciences sector.
Risk. The primary bear case for Veeva centers on its valuation, with a P/E of 28 and PS of 7.7 leaving little room for error if growth were to decelerate. While the company dominates its niche, increased competition or market maturation within its core Veeva Commercial Cloud offerings, particularly the Veeva Vault CRM Suite for pharmaceutical and biotechnology companies, could pressure future expansion. A concrete signal confirming the bear case would be a sustained decline in its FY YoY revenue growth below the current 16.3%, indicating a softening in demand for its specialized life sciences software.
Horizon. 1-3 yr $244.59 (analyst consensus (n=27)) — fundamentals + valuation re-rating. 5 yr $358.11 at ~18% CAGR — compounding case rests on the competitive position widening. 10 yr $531.23 if current growth sustains into durable earnings power.
18. META — Meta Platforms, Inc. · score 82.4
Internet Content & Information · price $542.87 · 1Y $827.32 · 5Y $1,211 · 10Y $1,797
FCF $48.3b A · Rev +22.2% A- · D/E 0.36 B+ · P/E 19.7x B · PEG 0.81 B+
Why now. Meta's core Family of Apps (FoA) segment continues to deliver exceptional free cash flow and revenue growth, making its current valuation highly attractive for a compounder. With $48.3b in TTM free cash flow and 22.2% FY YoY revenue growth, the company trades at a compelling 0.81 PEG ratio, signaling undervaluation relative to its growth prospects. The market is underappreciating the sustained monetization potential and user engagement across its massive social platforms, particularly Instagram and Facebook.
Moat. Meta's durable edge stems from powerful network effects and high switching costs embedded within its Family of Apps (FoA) segment. Products like Facebook, Instagram, and Messenger create a self-reinforcing loop where users attract more users, making it exceptionally difficult for new entrants to compete at scale. The company's impressive 29% Return on Equity reflects the significant pricing power derived from its unparalleled reach and engagement, allowing it to monetize through advertising across its vast global user base.
Risk. The significant investment in Reality Labs (RL) for virtual reality (VR) headsets and AI glasses, coupled with a highly competitive and evolving social media landscape, poses a substantial execution risk. Despite a robust 32.8% profit margin from its core business, the current_price of $542.87 is near its week_52_low of $520.26, indicating investor skepticism about the profitability of new ventures or sustained growth. A sustained deceleration in FoA revenue growth below 15% or continued, significant losses in Reality Labs without a clear path to profitability would confirm the bear case.
Horizon. 1-3 yr $827.32 (analyst consensus (n=59)) — fundamentals + valuation re-rating. 5 yr $1,211 at ~17% CAGR — compounding case rests on the competitive position widening. 10 yr $1,797 if current growth sustains into durable earnings power.
19. YELP — Yelp Inc. · score 82.4
Internet Content & Information · price $22.92 · 1Y $26.50 · 5Y $38.80 · 10Y $57.56
FCF $281m C · Rev +3.7% C+ · D/E 0.25 A- · P/E 10.5x A- · PEG 0.57 A-
Why now. Yelp's highly profitable platform, connecting consumers with local businesses across categories like restaurants and home services, is generating substantial free cash flow relative to its valuation. With a TTM FCF of $281m against a $1.3b market cap, the company trades at an incredibly low P/E of 10.5x, suggesting deep undervaluation for a business with a 22% ROE. The core thesis rests on the persistent demand for local business discovery and advertising, which Yelp effectively monetizes through its cost-per-click and multi-location Ad products.
Moat. Yelp's durable moat stems from its powerful network effect, where a growing base of consumers seeking local businesses across diverse categories (like beauty and fitness, or auto services) attracts more businesses to its platform for advertising, and vice-versa. This established user base and business directory create significant switching costs for both sides, making it difficult for new entrants to replicate. The company's impressive 22% ROE is a direct result of this entrenched position, allowing it to command pricing power for its free and paid advertising products, including cost-per-click and multi-location ads.
Risk. The bear case hinges on Yelp's anemic top-line expansion, with revenue growth at a mere 3.7% FY YoY, suggesting its platform may be reaching maturity or struggling to fend off competition in local search. Despite its low valuation multiples, this slow growth, coupled with a relatively low P/S of 0.9x, indicates skepticism about its ability to meaningfully expand its market share or effectively monetize newer initiatives like Yelp Connect. A sustained deceleration in advertising product uptake or a failure to significantly accelerate revenue growth beyond current levels would confirm the bear thesis, trapping the stock in a value trap despite its free cash flow generation.
Horizon. 1-3 yr $26.50 (analyst consensus (n=8)) — fundamentals + valuation re-rating. 5 yr $38.80 at ~11% CAGR — compounding case rests on the competitive position widening. 10 yr $57.56 if current growth sustains into durable earnings power.
20. RMD — ResMed Inc. · score 82.3
Medical Instruments & Supplies · price $198.60 · 1Y $260.60 · 5Y $381.54 · 10Y $566.00
FCF $1.8b C+ · Rev +9.8% B · D/E 0.13 B+ · P/E 19.1x B+ · PEG 1.16 B+
Why now. ResMed's robust ecosystem of medical devices and cloud-based software applications for diagnosing and managing respiratory disorders, especially sleep apnea, underpins its consistent financial performance. A stellar 27.4% profit margin and $1.8B in free cash flow demonstrate the company's operational efficiency and market leadership, while a low 0.13 debt-to-equity ratio provides significant financial flexibility. The crux of the thesis is ResMed's ability to compound value by expanding its integrated solutions within a growing global need for sleep and breathing health management.
Moat. ResMed's durable edge stems from its integrated ecosystem of medical devices like ApneaLink Air and NightOwl, combined with proprietary cloud-based software applications for diagnosing and managing respiratory disorders. This comprehensive offering creates high switching costs for healthcare providers and patients, cementing its category leadership in the Sleep and Breathing Health segment. A remarkable 23.4% Return on Equity is a direct result of this pricing power and efficiency derived from its specialized, difficult-to-replicate medical technology and software solutions.
Risk. Skeptics might argue that ResMed's growth trajectory, while steady at 9.8% revenue growth, is not accelerating enough to justify its current valuation, especially with the stock trading near its $180.27 52-week low. The company's reliance on its Sleep and Breathing Health segment for medical devices and cloud-based software could face increased competitive pressure or shifts in treatment preferences for respiratory disorders. A sustained decline in the average selling price of its core diagnostic devices like ApneaLink Air, leading to a contraction in its impressive profit margin, would confirm the bear case.
Horizon. 1-3 yr $260.60 (analyst consensus (n=15)) — fundamentals + valuation re-rating. 5 yr $381.54 at ~14% CAGR — compounding case rests on the competitive position widening. 10 yr $566.00 if current growth sustains into durable earnings power.
21. CVSA — Covista Inc. · score 81.9
Education & Training Services · price $124.16 · 1Y $156.25 · 5Y $228.77 · 10Y $339.36
FCF $336m C · Rev +12.9% B+ · D/E 0.54 B+ · P/E 18.1x B+ · PEG 0.88 B+
Why now. Covista Inc. is a compelling growth compounder, leveraging its specialized healthcare education segments to deliver consistent financial performance. With a robust 12.9% FY YoY revenue growth and a healthy 12.3% profit margin, the company generates significant free cash flow of $336m, translating to an attractive FCF yield against its market cap. The thesis rests on the persistent demand for skilled healthcare professionals, ensuring a steady pipeline for its nursing, medical, and veterinary programs.
Moat. Covista's durable edge stems from its established and accredited institutions like Chamberlain University and American University of the Caribbean, which create high barriers to entry in specialized healthcare education. The rigorous accreditation processes and the critical nature of degrees in nursing, medical, and veterinary fields foster significant switching costs for students and employers, protecting its 17.2% ROE from new entrants.
Risk. Skeptics point to the regulatory landscape for for-profit education, which could introduce headwinds or impact federal funding eligibility, potentially slowing growth from its 12.9% FY YoY rate. Furthermore, a 0.54 debt-to-equity ratio, while manageable, could become a concern if enrollment in key segments like Walden University's online programs faces unexpected declines. A sustained drop in student retention or a significant policy shift impacting federal student aid would confirm the bear case.
Horizon. 1-3 yr $156.25 (analyst consensus (n=4)) — fundamentals + valuation re-rating. 5 yr $228.77 at ~13% CAGR — compounding case rests on the competitive position widening. 10 yr $339.36 if current growth sustains into durable earnings power.
22. MELI — MercadoLibre, Inc. · score 81.9
Internet Retail · price $1619.25 · 1Y $2,217 · 5Y $3,246 · 10Y $4,815
FCF $11.8b A- · Rev +34.3% A · D/E 1.70 C+ · P/E 42.8x C · PEG 1.02 B+
Why now. MercadoLibre is a high-quality compounder, leveraging its integrated Mercado Libre Marketplace and Mercado Pago ecosystem to dominate Latin America's digital economy. With revenue growth at an impressive 34.3% (FY YoY) and a robust 26.4% ROE, the company generates substantial free cash flow of $11.8b, indicating strong operational efficiency. This powerful flywheel effect between e-commerce and financial services in underserved markets is the core driver of its persistent growth.
Moat. MELI's durable edge stems from the powerful network effects created by its integrated ecosystem, encompassing the Mercado Libre Marketplace, Mercado Pago financial technology, Mercado Envios logistics, and Mercado Credito lending. This comprehensive suite of services creates significant switching costs for both buyers and sellers, fostering a sticky platform that is difficult for competitors to dislodge. The company's 26.4% ROE is a direct result of this category leadership and pricing power within its dominant regional footprint, allowing it to capture increasing transaction volumes and expand its financial services offerings.
Risk. The primary bear case against MELI centers on the elevated valuation and potential for increased competition or regulatory headwinds in its core Latin American markets. A P/E of 42.8 is substantial, and a Debt-to-Equity of 1.7 introduces leverage risk, particularly if economic conditions worsen. A sustained deceleration in revenue growth significantly below the current 34.3% (FY YoY), coupled with further contraction in the 8.6% profit margin, would confirm that competitive pressures are eroding its market dominance and profitability.
Horizon. 1-3 yr $2,217 (analyst consensus (n=24)) — fundamentals + valuation re-rating. 5 yr $3,246 at ~15% CAGR — compounding case rests on the competitive position widening. 10 yr $4,815 if current growth sustains into durable earnings power.
23. PRDO — Perdoceo Education Corporation · score 81.5
Education & Training Services · price $32.98 · 1Y $35.62 · 5Y $44.97 · 10Y $57.67
FCF $225m C · Rev +24.2% A- · D/E 0.12 A- · P/E 12.6x A- · PEG 0.70 A-
Why now. Education & Training Services · market cap $2.1b. 14% off the 52-week high of $38.50. Revenue growing +24%, comfortably above the S&P median. PEG 0.70 — paying under fair value for the growth rate.
Moat. Net margin 20% beats the market median by a meaningful margin — the company is keeping more of every revenue dollar than the average S&P constituent. ROE 17% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately. FCF converts 132% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.
Risk. Value re-rating depends on a catalyst. Without one — analyst day, divestiture, margin recovery, capital return — the stock can stay cheap on these multiples for years.
Horizon. 1-3 yr $35.62 (structural (no analyst coverage)) — multiple re-rating thesis requires a catalyst. 5 yr $44.97 at ~6% CAGR — dividend + buyback compounding. 10 yr $57.67 if the moat survives secular pressure.
24. EPAC — Enerpac Tool Group Corp. · score 79.6
Specialty Industrial Machinery · price $37.07 · 1Y $42.63 · 5Y $62.42 · 10Y $92.59
FCF $111m C · Rev +4.6% C+ · D/E 0.46 B+ · P/E 23.3x B+ · PEG 0.34 A
Why now. Enerpac Tool Group Corp. is a high-quality industrial compounder, trading at a compelling valuation despite its robust profitability and market position in specialized tools. The company's focus on highly engineered heavy lifting technology solutions and branded hydraulic tools for critical infrastructure and alternative energy markets drives a 21% Return on Equity and a healthy 13.7% profit margin. With a remarkably low 0.34 PEG ratio, the market is significantly underpricing EPAC's future earnings growth, making it a prime candidate for re-rating as its essential industrial solutions continue to compound value. The crux rests on the persistent demand for its specialized tools and services across diverse, mission-critical end markets.
Moat. EPAC's durable edge stems from its highly engineered heavy lifting technology solutions and branded hydraulic tools, which are critical for safety and precision in infrastructure, oil and gas, and alternative energy projects. The 21% Return on Equity is a direct result of pricing power derived from category leadership in these specialized, mission-critical industrial applications, where reliability and performance are paramount, creating significant switching costs for customers. Furthermore, the recurring revenue from services and tool rentals for industrial maintenance and MRO further solidifies customer relationships, making it difficult for competitors to displace EPAC's installed base.
Risk. The primary risk for EPAC is its exposure to highly cyclical end markets such as oil and gas, mining, and civil construction, where demand for its industrial products and solutions can fluctuate significantly with global economic conditions. While current revenue growth is positive at 4.6%, a broader industrial slowdown could quickly decelerate this, making its 23.3 P/E multiple appear less attractive. A sustained decline in new infrastructure or energy project spending, reflected in consecutive quarters of negative revenue growth, would confirm the bear case.
Horizon. 1-3 yr $42.63 (structural (no analyst coverage)) — fundamentals + valuation re-rating. 5 yr $62.42 at ~11% CAGR — compounding case rests on the competitive position widening. 10 yr $92.59 if current growth sustains into durable earnings power.
25. FIVE — Five Below, Inc. · score 79.2
Specialty Retail · price $186.59 · 1Y $261.57 · 5Y $330.23 · 10Y $423.51
FCF $505m C+ · Rev +22.9% A- · D/E 0.86 B · P/E 23.6x B · PEG 0.98 B+
Why now. Specialty Retail · market cap $10.3b. Down 26% from 52-week high of $251.63 — deep drawdown territory. Revenue growing +23%, comfortably above the S&P median. PEG 0.98 — paying under fair value for the growth rate. 21 sell-side analysts rate this a Buy with a mean 1-yr target of $261.57 (implying +40% upside).
Moat. ROE 19% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately. FCF converts 115% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.
Risk. Value re-rating depends on a catalyst. Without one — analyst day, divestiture, margin recovery, capital return — the stock can stay cheap on these multiples for years.
Horizon. 1-3 yr $261.57 (analyst consensus (n=21)) — multiple re-rating thesis requires a catalyst. 5 yr $330.23 at ~12% CAGR — dividend + buyback compounding. 10 yr $423.51 if the moat survives secular pressure.
26. WLDN — Willdan Group, Inc. · score 78.2
Engineering & Construction · price $78.93 · 1Y $85.24 · 5Y $107.62 · 10Y $138.02
FCF $43m C- · Rev +20.5% A- · D/E 0.22 A- · P/E 21.2x B+ · PEG 0.48 A
Why now. Engineering & Construction · market cap $1.2b. Down 42% from 52-week high of $137.00 — deep drawdown territory. Revenue growing +20%, comfortably above the S&P median. PEG 0.48 — paying under fair value for the growth rate.
Moat. ROE 18% sits above Buffett's preferred 15% threshold — the equity base is compounding at a rate the market struggles to discount accurately.
Risk. Down 42% from the 52-week high — the market is pricing in something the screen can't see; verify the bear case before sizing up.
Horizon. 1-3 yr $85.24 (structural (no analyst coverage)) — multiple re-rating thesis requires a catalyst. 5 yr $107.62 at ~6% CAGR — dividend + buyback compounding. 10 yr $138.02 if the moat survives secular pressure.
27. DECK — Deckers Outdoor Corporation · score 78.1
Footwear & Accessories · price $102.59 · 1Y $126.86 · 5Y $160.15 · 10Y $205.39
FCF $1.1b C+ · Rev +9.8% B · D/E 0.15 A · P/E 14.6x A- · PEG 1.32 B
Why now. Footwear & Accessories · market cap $14.2b. 19% off the 52-week high of $126.50. 21 sell-side analysts rate this a Buy with a mean 1-yr target of $126.86 (implying +24% upside).
Moat. Net margin 19% beats the market median by a meaningful margin — the company is keeping more of every revenue dollar than the average S&P constituent. ROE 41% — top-decile capital efficiency. Either pricing leverage, low capital intensity, or aggressive buybacks; the durability story depends on which. FCF converts 107% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.
Risk. Value re-rating depends on a catalyst. Without one — analyst day, divestiture, margin recovery, capital return — the stock can stay cheap on these multiples for years.
Horizon. 1-3 yr $126.86 (analyst consensus (n=21)) — multiple re-rating thesis requires a catalyst. 5 yr $160.15 at ~9% CAGR — dividend + buyback compounding. 10 yr $205.39 if the moat survives secular pressure.
28. HURN — Huron Consulting Group Inc. · score 78.1
Consulting Services · price $92.21 · 1Y $184.25 · 5Y $269.76 · 10Y $400.17
FCF $124m C · Rev +11.7% B · D/E 2.24 C · P/E 15.8x A- · PEG 1.47 B
Why now. Consulting Services · market cap $1.5b. Down 51% from 52-week high of $186.78 — deep drawdown territory. Revenue growing +12%, comfortably above the S&P median. 4 sell-side analysts rate this a Strong Buy with a mean 1-yr target of $184.25 (implying +100% upside).
Moat. ROE 26% — top-decile capital efficiency. Either pricing leverage, low capital intensity, or aggressive buybacks; the durability story depends on which. FCF converts 119% of net income — earnings translate cleanly into cash, a sign that working capital and capex are well-disciplined.
Risk. D/E 2.24 is elevated — limits strategic flexibility and raises refinancing exposure if rates stay higher for longer. Down 51% from the 52-week high — the market is pricing in something the screen can't see; verify the bear case before sizing up.
Horizon. 1-3 yr $184.25 (analyst consensus (n=4)) — fundamentals + valuation re-rating. 5 yr $269.76 at ~24% CAGR — compounding case rests on the competitive position widening. 10 yr $400.17 if current growth sustains into durable earnings power.
29. NFLX — Netflix, Inc. · score 78.1
Entertainment · price $70.90 · 1Y $114.15 · 5Y $167.12 · 10Y $247.91
FCF $11.9b A- · Rev +15.9% B+ · D/E 0.54 B · P/E 22.9x B · PEG 1.41 B
Why now. Entertainment · market cap $298.5b. Down 47% from 52-week high of $134.12 — deep drawdown territory. Revenue growing +16%, comfortably above the S&P median. 44 sell-side analysts rate this a Buy with a mean 1-yr target of $114.15 (implying +61% upside).
Moat. Net margin 29% sits well above the S&P median (~11%) — suggests structural pricing advantage or cost discipline competitors can't quickly close. ROE 43% — top-decile capital efficiency. Either pricing leverage, low capital intensity, or aggressive buybacks; the durability story depends on which. $298.5b market cap places it among the largest companies in the sector — distribution, R&D, and customer-acquisition costs amortize across a base peers can't replicate.
Risk. Down 47% from the 52-week high — the market is pricing in something the screen can't see; verify the bear case before sizing up. Beta 1.49 implies above-market volatility — position-size to the drawdowns this name will produce in a market correction, not to its bull-case return.
Horizon. 1-3 yr $114.15 (analyst consensus (n=44)) — fundamentals + valuation re-rating. 5 yr $167.12 at ~19% CAGR — compounding case rests on the competitive position widening. 10 yr $247.91 if current growth sustains into durable earnings power.
30. DV — DoubleVerify Holdings, Inc. · score 77.8
Advertising Agencies · price $9.95 · 1Y $13.06 · 5Y $19.12 · 10Y $28.36
FCF $135m C · Rev +13.9% B+ · D/E 0.09 A- · P/E 30.2x C+ · PEG 0.62 A-
Why now. Advertising Agencies · market cap $1.5b. Down 41% from 52-week high of $16.82 — deep drawdown territory. Revenue growing +14%, comfortably above the S&P median. PEG 0.62 — paying under fair value for the growth rate. 17 sell-side analysts rate this a Buy with a mean 1-yr target of $13.06 (implying +31% upside).
Moat. Free cash flow runs well ahead of reported net income — non-cash charges (depreciation, intangible amortization) are holding down GAAP earnings while cash generation stays strong.
Risk. Down 41% from the 52-week high — the market is pricing in something the screen can't see; verify the bear case before sizing up. Trailing P/E 30x sits well above the S&P median (~20x) — multiple compression is a real risk if revenue growth decelerates. ROE 5% is below the long-run sustainable threshold of ~10% — capital efficiency would need to improve for the equity base to compound at the market rate.
Horizon. 1-3 yr $13.06 (analyst consensus (n=17)) — fundamentals + valuation re-rating. 5 yr $19.12 at ~14% CAGR — compounding case rests on the competitive position widening. 10 yr $28.36 if current growth sustains into durable earnings power.
Methodology footnote
Every pick on this list comes out of the same quality-growth model — one 0–100 score blending quality, growth, and value — applied to every US-listed common stock with a market cap above $1B. Each pick's score breakdown is auditable from the home page — click the ticker on the rankings page to see exactly which grades produced the number. Not investment advice. See terms for full disclosures.