Investors are often drawn to growth stocks due to their potential for above-average financial growth, which can lead to exceptional returns. However, identifying a truly great growth stock can be challenging, as these stocks typically come with higher risk and volatility. Choosing a stock whose growth story is already over or nearing its end can result in significant losses.

Research indicates that stocks with strong growth characteristics consistently outperform the market. 

Here are three key factors that make Nvidia (NASDAQ:NVDA) an attractive growth pick:

Earnings Growth: Earnings growth is a crucial factor for investors, as stocks with surging profit levels tend to attract more attention. While Nvidia has a historical EPS growth rate of 50%, the company’s projected EPS growth of 79.1% for this year far exceeds the industry average of -3.5%.

Cash Flow Growth: Cash flow is essential for any business, especially for growth-oriented companies. Nvidia’s year-over-year cash flow growth rate of 303.7% outpaces many of its peers and far exceeds the industry average of -14.3%. Additionally, the company’s annualized cash flow growth rate over the past 3-5 years has been an impressive 50.2%, compared to the industry average of 7.1%.

Earnings Estimate Revisions: Another key indicator of a stock’s potential is the trend in earnings estimate revisions. Positive revisions indicate favorable prospects. Nvidia has seen upward revisions in its current-year earnings estimates, with the Consensus Estimate surging 16.4% over the past month.

In conclusion, Nvidia’s strong growth metrics and promising outlook make it a compelling growth stock for investors seeking above-average returns.

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