Are You a Momentum Investor? This Stock Could Be the Perfect Pick

Investors of all ages and skill levels strive to capitalize on the stock market and build their portfolios confidently. Fortunately, there are many tools to achieve this, and one of the most effective is a service that offers comprehensive stock research and insights.

This service provides daily updates on stock ratings, industry rankings, and access to a wealth of detailed stock reports, empowering investors to make informed decisions. One notable feature of this research service is the Zacks Style Scores.

Understanding the Zacks Style Scores

The Zacks Style Scores are a set of indicators designed to rate stocks based on popular investment strategies: value, growth, and momentum. They work in conjunction with the Zacks Rank to help investors select stocks that are likely to outperform the market in the near future.

Each stock receives a grade from A to F, reflecting its potential across these three investing styles. A higher letter grade indicates a better chance of delivering positive returns. Here's a closer look at the individual Style Scores:

Value Score

Value investors aim to find stocks that are undervalued relative to their true worth. The Value Style Score assesses several financial ratios, including P/E, Price/Sales, and more, to uncover stocks that are selling at attractive prices.

Growth Score

Growth investors prioritize a company's future potential. The Growth Style Score evaluates factors such as projected earnings and revenue growth to identify stocks with strong upward growth trajectories.

Momentum Score

Momentum investors seek to capitalize on trends in stock prices. This score focuses on recent price movements and earnings estimate revisions, guiding investors on when to buy into stocks that are gaining momentum.

VGM Score

If you prefer to consider both value and growth, the VGM Score combines all three Style Scores, allowing for a well-rounded evaluation of stocks that exhibit strong characteristics across these categories.

How Style Scores Align with Zacks Rank

The Zacks Rank is a proprietary stock-rating model that helps investors assess stocks based on earnings estimate revisions. It has proven effective over the years, with #1 (Strong Buy) stocks historically delivering impressive returns.

With a wealth of stock options available daily, the Style Scores narrow down the selection by highlighting those stocks with high Zacks Ranks and strong Style Scores of A or B, enhancing the chances for significant returns. If a stock has a #3 (Hold) rank, it’s advisable to ensure it has an A or B Style Score to maximize upside potential.

Ultimately, keeping a portfolio filled with stocks that boast a #1 or #2 Zacks Rank and favorable Style Scores can lead to a more successful investment strategy.

Featured Stock: Zoom Video Communications (ZM)

Zoom Video Communications is a prominent player in the tech sector, particularly known for its user-friendly communication platform, which plays a vital role in today's remote work and learning environments. Recently, it has seen a surge in demand due to the ongoing shift towards online collaboration.

Currently, Zoom holds a #1 (Strong Buy) Zacks Rank and has a solid VGM Score of B. For momentum investors, ZM's momentum Style Score of A is noteworthy, particularly as shares have risen by 10% in the past month.

In the last two months, nine analysts have raised their earnings estimates for the upcoming fiscal year, indicating positive momentum for the company. The consensus estimate for fiscal 2025 has been lifted by $0.08 to reach $5.42 per share, with Zoom achieving an average earnings surprise of 14.3%.

Given its favorable rankings and strong performance metrics, Zoom Video Communications is a stock worth considering for your portfolio.

investment, stocks, momentum