I want to buy undervalued growth stocks.

Screening Filters

1. market_cap > $1B

   • Purpose: Focus on established companies rather than very small, highly speculative names.
   • Rationale: “Undervalued growth stocks” usually implies businesses that are already sizable enough to have real operating history, liquidity, and more reliable financial reporting. A $1B+ market cap helps avoid microcaps where growth can be erratic and valuation can be distorted by illiquidity.

2. Quarterly revenue YoY growth > 30%

   • Purpose: Identify companies with strong top-line growth.
   • Rationale: Growth stocks should be expanding sales quickly. A 30%+ year-over-year revenue increase signals that the company is still in a strong expansion phase, which is a core trait of a growth stock.

3. Quarterly EPS YoY growth > 30%

   • Purpose: Capture companies whose earnings are growing rapidly, not just sales.
   • Rationale: Strong revenue growth is good, but investors typically want growth to translate into profits too. High EPS growth suggests improving profitability and operating leverage, which makes a growth stock more attractive and potentially more sustainable.

4. P/E ratio (TTM) < 20

   • Purpose: Screen for stocks that are reasonably priced relative to earnings.
   • Rationale: “Undervalued” generally means the stock is not trading at a rich multiple. A P/E under 20 helps find growth companies that are still priced conservatively compared with the broader market and with many typical high-growth names.

5. P/S ratio < 3

   • Purpose: Add a valuation check based on revenue.
   • Rationale: Some growth companies may have temporarily distorted earnings, so price-to-sales provides an additional valuation anchor. A P/S under 3 suggests investors are not paying an excessive amount for each dollar of sales, which supports the “undervalued” part of the request.

Why These Filters Work Together

• The growth filters (revenue YoY > 30% and EPS YoY > 30%) ensure the stocks are truly growing, not just cheap for no reason.
• The valuation filters (P/E < 20 and P/S < 3) help isolate companies that may be growing faster than the market is pricing them.
• The market cap filter keeps the screen focused on more established companies, which can reduce the risk of false positives from tiny speculative names.

Why Results Match

• They are designed to find companies with strong current growth in both sales and earnings.
• They also require those companies to be reasonably valued, which aligns with the idea of “undervalued growth stocks.”
• The screen balances quality, growth, and valuation, making it well-suited for an investor looking for growth opportunities without overpaying.