Consistent sales growth is critical for a company’s success, as it’s the foundation of generating profits. Strong revenue generation allows companies to achieve scaling efficiencies, generate continuous shareholder value, and many other clear benefits.
And when it comes to top line strength, three companies – Uber Technologies UBER, Mercado Libre MELI, and Cadence Design Systems CDNS – have been standouts.
All three have enjoyed solid revenue growth over the last several years and have seen recent positive earnings estimate revisions, with the latter reflecting optimism among analysts.
For those seeking top line compounders, let’s take a closer look at each.
Uber
Uber has seen its near-term earnings outlook shift positively, helping land the stock into a Zacks Rank #1 (Strong Buy). The revisions trend has been particularly notable for its current year, as shown below.
Image Source: Zacks Investment Research
The company’s growth trajectory is impossible to ignore, with earnings forecasted to soar 110% on 18% higher revenues in its current year. And the growth is slated to continue in a big way, with expectations for FY24 suggesting 160% earnings growth paired with an 18% sales bump.
Further, Uber has been a big-time earnings performer, exceeding the Zacks Consensus EPS Estimate by an average of 475% across its last four releases. As shown below, the company’s sales growth has been rock-solid.
Image Source: Zacks Investment Research
MercadoLibre
Mercado Libre, a current Zacks Rank #1 (Strong Buy), is one of the largest e-commerce platforms in South America. Earnings expectations for the company have moved higher across the board.
Image Source: Zacks Investment Research
The company’s top line growth has been robust, with FY22 sales of $10.5 billion climbing 630% since just 2018. In fact, revenues have grown annually by double-digit percentages in each year throughout the period.
To little surprise, the growth is slated to continue, with Zacks Consensus Estimates suggesting 32% revenue growth in its current year (FY23) and a further 24% in FY24. Below is a chart illustrating the company’s revenue on an annual basis.
Image Source: Zacks Investment Research
Cadence Design Systems
Cadence Design Systems, a current Zacks Rank #2 (Buy), offers products and tools that help customers design electronic products. The revisions trend has been particularly noteworthy for its current fiscal year, with the EPS estimate up 12% since October of last year.
Image Source: Zacks Investment Research
Like those above, the company boasts a strong growth profile, with Zacks Consensus Estimates suggesting 14% sales growth in its current year and an additional 10% in FY24. As we can see below, the company’s top line growth has recently seen an acceleration.
Image Source: Zacks Investment Research
The company has been the definition of consistency within its quarterly results, exceeding the Zacks Consensus EPS Estimate in 22 consecutive releases. Over its last four releases, the average EPS beat works out to be a solid 5.4%.
Bottom Line
Strong revenue generation leads to many positives, such as scaling efficiencies and meaningful earnings growth.
And when it comes to strong revenue trends, all three companies above – Uber Technologies UBER, Mercado Libre MELI, and Cadence Design Systems CDNS – precisely fit the criteria.
In addition to inspiring revenue growth, all three have enjoyed favorable earnings estimate revisions, indicating bullishness among analysts.
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