Investor's Business Daily's Earnings Per Share Rating looks to uncover companies in the stock market with outstanding earnings growth, especially those firms showing exceptionally strong growth in recent quarters.
Rated on a scale of 1-99 with 99 being the best, stocks with a 99 EPS Rating have outperformed 99% of all stocks in terms of recent earnings growth. Typically, these stocks have a solid, longer-term record of bottom-line growth as well.
While the focus should generally be on stocks with EPS Ratings of 75 or higher, you'll occasionally find stocks in the IBD 50 with seemingly subpar EPS Ratings. But don't automatically dismiss an IBD 50 stock from consideration just because it has a middling rating. Sometimes, it's the only blemish among several other positive qualities.
In other cases, unprofitable companies with sluggish EPS Ratings are right on the verge of profitability amid booming revenue growth and strong fund ownership trends. Biotech stocks and recent initial public offerings provide good examples.
Stock Market Leaders Don't Always Lead In Earnings
In the accompanying table, security software firm Rubrik's recent EPS Rating of 53 doesn't look great because the company isn't profitable yet. But losses have been narrowing in recent years. After losing $1.94 a share in 2023, the loss narrowed to $1.35 last year. It's expected to narrow again in 2026 to $1.15
But the MarketSurge weekly chart for Rubrik shows that revenue growth has accelerated for two straight quarters, from 43% to 47%. The company's software helps clients protect data and recover quickly from ransomware attacks. About 85% of Rubrik's revenue comes from subscription sales.
In the January-ended quarter, revenue jumped 47% to $258.1 million, nicely above the $233.1 million consensus.
Keep in mind that Rubrik also spends a lot on research and development costs. In fiscal 2025, for example, revenue totaled $887 million. It put a whopping 60% of that total toward R&D. Spending like this often weighs on profitability.
New issue CoreWeave has yet to show a profit, which leaves its EPS Rating at a paltry 23. Like Rubrik, CoreWeave also spends a lot on R&D.
The company on Wednesday reported a wider-than-expected loss. But revenue came in well ahead of expectations, up 420% to $981.6 million. CoreWeave also raised its full-year revenue outlook. Fund sponsorship remains limited with CoreWeave, but the highly regarded Fidelity Contrafund (FCNTX) recently started a new position.
For its second quarter, analysts see CoreWeave revenue leaping 165% to $1.03 billion. As an artificial intelligence hyperscaler, CoreWeave essentially rents out computing power to clients, which allows clients to train and run AI models.
Duolingo Stands Tall
Then there's Duolingo, which operates a popular language-learning platform. An EPS Rating of 62 doesn't stir a lot of excitement, but the stock shows strength in several other areas.
The company has been profitable since 2024, and continues to offer a compelling growth story. But Duolingo's EPS Rating of 62 gets weighed down by a slowdown in earnings growth in recent quarters.
Analysts expect growth to ramp back up in the second half of the year, however, amid consistently strong top-line growth of at least 25% year over year.
Also note that Duolingo has strong annual earnings estimates. Wall Street sees full-year profit climbing 60% this year and 49% in 2026.
Follow Ken Shreve on X @IBD_KShreve for more stock market analysis and insight.
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