Nvidia is the No. 1 S&P 500 growth stock in -2-

   ServiceNow Inc.                       NOW                                                         78%                                       21.0%                                     21.7%                                     19.0% 
   Fortinet Inc.                         FTNT                                                         5%                                       11.3%                                      8.8%                                      5.7% 
   DexCom Inc.                           DXCM                                                        19%                                       19.3%                                     21.4%                                     37.1% 
   Dayforce Inc.                         DAY                                                        -11%                                       13.9%                                     16.1%                                     23.6% 
   EQT Corp.                             EQT                                                         22%                                       11.1%                                     32.4%                                     44.5% 
   Nvidia Corp.                          NVDA                                                       229%                                       51.7%                                     56.8%                                     62.0% 
                                                                                                                                                                                                                         Source: FactSet 

Tesla ranked second on last year's list and missed this year's cut because its expected sales CAGR through 2025 is below 15% and its expected EPS CAGR is below 10%. But its FCF CAGR is expected to be way above the 10% threshold for the screen.

Take-Two Interactive Software Inc. (TTWO) didn't pass this year's screen because of the company's negative FCF during calendar 2023.

Dayforce Inc. (DAY) just missed the cut for the new list, with a projected sales CAGR below the 15% threshold. The company was formerly known as Ceridian HCM Holding Inc.

Looking at price changes since March 25, 2023, the average for this group through Friday was 22%, while the S&P 500 rose 29%, excluding dividends. And only two companies - ServiceNow and Nvidia - showed price increases beating that of the index.

Maybe one year isn't a fair measure of success for a list arrived at by looking at projected two-year growth rates. But it shows how expectations can change and how difficult it can be to use estimates to screen stocks.

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-Philip van Doorn

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04-15-24 1107ET

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