Here’s What Makes Palomar (PLMR) a Top Growth Stock

Maximize Your Investment Potential with Zacks Premium

No matter your level of experience or age, every investor aims to make the most of the stock market and invest with assurance. Zacks Premium provides a variety of resources to help you achieve these goals.

This well-regarded research platform empowers you to make informed decisions by offering daily updates on the Zacks Rank and Industry Rank, access to the exclusive Zacks #1 Rank List, in-depth equity research reports, and advanced stock screening tools.

Subscribers also benefit from the Zacks Style Scores, a unique feature of the service.

Understanding Zacks Style Scores

The Zacks Style Scores, developed to complement the Zacks Rank, are a set of ratings designed to help investors identify stocks with the highest potential to outperform the market within the next month.

Each stock receives a letter grade—A, B, C, D, or F—based on its value, growth, and momentum characteristics. An 'A' rating signals the strongest prospects, while lower grades indicate decreasing potential for outperformance.

There are four main Style Score categories:

Value Score

For those who seek undervalued opportunities, the Value Score highlights stocks trading below their intrinsic worth. This score is calculated using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, helping investors spot the most attractively priced companies before the broader market does.

Growth Score

Growth-oriented investors focus on companies with robust financial health and promising future prospects. The Growth Score evaluates factors like historical and projected earnings, sales, and cash flow to pinpoint stocks with the potential for sustained expansion.

Momentum Score

Momentum investing is centered on capitalizing on prevailing trends in stock prices or earnings forecasts. The Momentum Score considers recent price movements and changes in earnings estimates, guiding investors toward stocks experiencing strong upward momentum.

VGM Score

The VGM Score combines the strengths of the Value, Growth, and Momentum scores into a single, comprehensive rating. This helps investors quickly identify stocks that excel across all three investment styles, making it a powerful tool when used alongside the Zacks Rank.

How Style Scores Enhance the Zacks Rank

The proprietary Zacks Rank system uses changes in earnings estimates to help investors build successful portfolios. Since its inception in 1988, stocks rated #1 (Strong Buy) have delivered an impressive average annual return of +23.86%, more than twice the performance of the S&P 500. However, with over 800 stocks rated as Strong Buy or Buy on any given day, narrowing down the best options can be challenging.

This is where the Style Scores prove invaluable. To optimize your investment returns, focus on stocks with a Zacks Rank of #1 or #2 and a Style Score of A or B. If considering stocks with a #3 (Hold) rating, prioritize those with high Style Scores to maximize potential gains.

Since the Style Scores are designed to work in tandem with the Zacks Rank, it's important to pay attention to the direction of earnings estimate revisions when selecting stocks. For example, even if a stock with a #4 (Sell) or #5 (Strong Sell) rating has high Style Scores, a negative earnings outlook suggests a higher risk of price decline.

In summary, holding more stocks with top Zacks Ranks and high Style Scores increases your chances of investment success.

Featured Stock: Palomar (PLMR)

Palomar Holdings, Inc., based in La Jolla, California, was established in 2014 following the acquisition of Palomar Specialty Insurance Company. Incorporated in Delaware in 2019, Palomar operates as an insurance holding company.

Currently, PLMR holds a #2 (Buy) Zacks Rank and boasts an A rating for its VGM Score.

The company is particularly appealing to growth investors, with an A Growth Style Score and an expected earnings increase of 22.5% for the current fiscal year.

For fiscal year 2026, five analysts have raised their earnings projections in the past two months, pushing the Zacks Consensus Estimate up by $1.00 to $9.63 per share. PLMR also has an average earnings surprise of +14.2%.

With its strong Zacks Rank and leading Growth and VGM Scores, PLMR stands out as a stock worth considering.

Top Analyst’s “Best Pick to Double”

Out of thousands of stocks, five Zacks experts have each selected one they believe could soar by 100% or more in the coming months. From these, Director of Research Sheraz Mian has singled out the one with the greatest upside potential.

This company, which targets millennial and Gen Z consumers, generated nearly $1 billion in revenue last quarter. A recent dip in its share price presents a timely buying opportunity. While not every recommendation achieves such dramatic gains, this pick could outperform previous Zacks selections like Nano-X Imaging, which surged 129.6% in just over nine months.