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Understanding the Zacks Premium Investment Tools
Whether you’re a seasoned investor or just starting out, the goal of maximizing returns in the stock market is universal. Fortunately, there are powerful tools available to help investors make informed decisions and build confidence in their strategies. One such resource is Zacks Premium, which provides a comprehensive suite of research and analytical tools designed to enhance investment performance.
Zacks Premium offers daily updates on the Zacks Rank and Zacks Industry Rank, along with full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens. These features empower investors to make smarter choices and gain a competitive edge in the market. Additionally, the service includes access to the Zacks Style Scores, which provide valuable insights into a stock’s potential for outperforming the market.
What Are the Zacks Style Scores?
The Zacks Style Scores are complementary indicators developed alongside the Zacks Rank. They evaluate stocks based on three key investing methodologies: value, growth, and momentum. By analyzing these characteristics, the scores help investors identify stocks that have the best chance of beating the market over the next 30 days.
Each stock receives a rating from A to F, with an A being the highest and an F the lowest. The higher the score, the greater the likelihood of outperformance. This scoring system allows investors to quickly assess a stock’s strengths and weaknesses.
The Four Categories of Zacks Style Scores
Value Score
For value investors, the focus is on finding undervalued stocks that offer strong fundamentals at attractive prices. The Value Style Score uses financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow to identify companies trading below their intrinsic value. This helps investors spot opportunities before the broader market recognizes them.
Growth Score
Growth investors prioritize companies with strong financial health and positive future outlooks. The Growth Style Score evaluates factors like historical and projected earnings, sales, and cash flow to identify stocks with sustainable growth potential. This score is ideal for those looking for long-term appreciation.
Momentum Score
Momentum investors rely on trends, often summarized by the phrase “the trend is your friend.” The Momentum Style Score analyzes price changes and earnings estimate revisions to determine favorable times to enter a position. This tool is particularly useful for traders seeking to capitalize on short-term price movements.
VGM Score
For investors who want a balanced approach, the VGM Score combines the value, growth, and momentum aspects into a single rating. It evaluates a stock based on its weighted performance across all three categories, making it easier to identify companies with strong value, promising growth, and positive momentum. The VGM Score works well in conjunction with the Zacks Rank.
How Style Scores Work with the Zacks Rank
The Zacks Rank is a proprietary stock-rating model that uses earnings estimate revisions to guide investors in building a winning portfolio. Since 1988, #1 (Strong Buy) stocks have delivered an average annual return of +23.62%, significantly outperforming the S&P 500. However, with over 800 top-rated stocks available, selecting the right ones can be overwhelming.
This is where the Zacks Style Scores come into play. To maximize returns, investors should focus on stocks with a Zacks Rank of #1 or #2 and Style Scores of A or B. Even if a stock has a #3 (Hold) rank, it’s still worth considering if it has high-quality Style Scores. On the other hand, a stock with a #4 (Sell) or #5 (Strong Sell) rank, even with strong Style Scores, may still carry significant risk due to declining earnings forecasts.
Stock to Watch: Salesforce.com (CRM)
Salesforce.com (CRM) is a leading provider of on-demand Customer Relationship Management (CRM) software, helping organizations manage sales automation, customer service, marketing, and analytics. As of now, CRM holds a Zacks Rank of #3 (Hold), with a VGM Score of B.
Despite its Hold rating, CRM has a Growth Style Score of A, indicating strong earnings growth potential. Analysts have recently revised their earnings estimates upward for fiscal 2026, with the Zacks Consensus Estimate increasing to $11.30 per share. Additionally, CRM has consistently exceeded earnings expectations, with an average surprise of +4.2%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, CRM is a stock worth considering for investors seeking growth opportunities.
