These 7 Stocks Are Analyst Favorites For Magnificent Earnings Growth; Renewable Energy Firm Humming

After the stock market sinks into a correction, it’s important to watch the stocks that are most loved by equity analysts. They may end up being the leaders of the next market uptrend.

Five Below (FIVE), Fabrinet (FN) and Arista Networks (ANET) are three of the seven best stocks where investors can find magnificent profit growth prospects. But stock market weakness has forced many top-rated stocks to tumble. So investors must be cautious with any new purchases.

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								What Big Tech Earnings Reveal About The AI Race
							

							

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						What Big Tech Earnings Reveal About The AI Race

Renewable Energy Firm’s EPS Surge

It’s been nearly a year since Enlight Renewable Energy (ENLT) broke out of a base, and that turned out to be a potent breakout. The stock soared 345% from an 18.28 buy point to a peak last month.

The stock has created few buy areas on its chart during that run, so it would be best if it can form a new base. That could be happening now, as shares consolidate the past four weeks.

On March 16, the company announced $304 million in financing for a solar power project in Idaho.

The Crimson Orchard project is a solar power and energy storage plant that will provide 120 megawatts of energy and 400 megawatt-hours of storage capacity. The company expects to complete the 528-acre project in the first half of 2027 at a total cost of $326 million to $342 million.

The project should generate $27 million to $28 million in revenue and about $20 million to $21 million in EBITDA in the first full year of operation. It will provide power to more than 25,000 Idaho homes, according to the Israel-based company.

Enlight Renewable Energy’s earnings soared 436% in Q1 of 2025, fell 83% the next quarter, then recovered 33% and 150% the two most recent quarters, according to IBD MarketSurge.

The stock has an EPS Rating of 99 and a Composite Rating of 99, both the highest in the alternative energy industry group.

Of 28 analysts who cover the company, 26 have buy or outperform ratings, and two have hold ratings.

Arista Networks

Arista Networks (ANET) has the highest EPS Rating in the computer networking industry group, a perfect 99. That high score comes after the company posted earnings gains of 30%, 38%, 25% and 24% the past four quarters, including the most recent quarterly report.

Fourth-quarter earnings topped estimates and the company raised 2026 revenue guidance, with artificial intelligence-related sales expected to double. It raised its full-year revenue growth outlook from 20% to 25%.

Arista also raised its 2026 AI networking revenue outlook to $3.25 billion from $2.75 billion.

Arista sells computer network switches that speed up communications in internet data centers. It has a formidable rival in Nvidia (NVDA). Both companies are targeting an emerging market for networking technology that connects clusters of AI servers in cloud-computing data centers.

In January, UBS named Arista a top pick for 2026.

Arista is forming a cup base with an early entry at 151.80. The stock has a 94 Composite Rating, tops in the networking industry group. Of 28 analysts covering the company, 93% have buy or outperform ratings.

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Sterling Infrastructure Earnings

Sterling Infrastructure (STRL) stock broke out of a cup base, but it is now 4% below the 419.14 buy point amid broad market weakness.

The heavy construction company has the highest EPS Rating (99) in its industry group, following accelerating earnings gains of 30%, 41%, 58% and 78% the past four quarters, according to MarketSurge.

While the company works on highways, bridges and other typical civil projects, its largest and highest-margin business is data centers and other tech-related construction. In the third quarter, revenue from the data center market grew more than 125% year over year. The company says its backlog and other expected work in tech infrastructure totals about $3 billion, much of it in data centers.

Analysts say rising power demand from data centers and manufacturing reshoring, combined with increasing utility capital spending, is driving record backlogs.

Sterling Infrastructure has guided full-year adjusted EPS of $10.35-$10.52.

Only six analysts cover Sterling, and all have buy or outperform recommendations. The average price target is 492.83, according to FactSet.

Fabrinet Earnings

Fabrinet broke out of an 11-week pattern Feb. 20 but is trading below the 531.22 buy point. Watch for shares to hold above the 50-day moving average and for the stock to form a new base.

The stock quickly rebounded from a 15% two-day sell-off that followed the Feb. 2 earnings report, even though results beat views.

December-ended quarter earnings rose 29% to $3.36 per share on sales of $1.13 billion, a 36% increase, according to MarketSurge, with both showing accelerating growth yet again.

Fabrinet sees first-quarter EPS of $3.45-$3.60, indicating another quarter of faster year-over-year growth. Its revenue target of $1.15 billion to $1.2 billion would maintain the rapid sales pace.

Fabrinet, the No. 1 stock in the contract manufacturing industry, makes optical communications gear, a method of sending data over long distances with high-speed light pulses. Fabrinet also produces optical modules that are essential for AI data centers.

Of 11 analysts who cover Fabrinet, 10 have buy or outperform recommendations. The other has a hold rating. Analysts at Rosenblatt Securities and Northland Securities in February raised their price targets to 715 and 700, the highest estimates.

Comfort Systems Earnings

Comfort Systems (FIX) climbed to a record high after it released its Q4 report on Feb. 19, but shares have eased. The stock could be forming a new base.

The company blew by estimates, as a $2.6 billion jump in its order backlog indicated that growth will continue.

Comfort’s outstanding growth comes as data center construction drives demand for the cooling and heating company. In its previous quarterly report, it cited “unprecedented demand” that made its backlog grow to over $9 billion for the first time, and $3.4 billion higher than when 2025 began.

The company has posted accelerating EPS gains of 67%, 75%, 102% and 129% the past four quarters, sending its EPS Rating to a pristine 99. That’s the highest in IBD’s air conditioning and heating products industry group. Comfort Systems also has one of the highest Composite Ratings in its industry group, at 99.

Of 10 analysts covering the company, eight have top recommendations and the rest have hold ratings.

The company specializes in heating, ventilation and air conditioning (HVAC) products, as well as electrical services for commercial and industrial buildings. Comfort Systems’ backlog is swelling thanks largely to demand for data centers, which require massive cooling.

Shares are now extended above the most recent buy point at 1,020.26. Investors should wait for a new pattern to emerge before considering a purchase of shares.

Celestica Leads Industry Group

Celestica (CLS) has the highest EPS Rating (99) in the contract manufacturing industry group, which ranks in the top 40 of 197 groups.

The Toronto-based company reported Jan. 28 fourth-quarter earnings of $1.89 a share, a 70% increase, on sales of $3.654 billion, up 44%. The consensus EPS estimate was $1.68 on sales of $3.506 billion.

Shares sold off the next day as the company’s operating-margin forecast for 2026 was unchanged, despite that it raised its revenue and profit outlook. That alarmed some analysts. The stock is meeting resistance at the 50-day line but continues to form a base with a 363.40 buy point. Watch for shares to hold above the 200-day line.

There’s heavy demand for Celestica’s rack integration services for data centers and the connectivity gear that handles AI workloads. The company is a key supplier for hyperscalers such as Alphabet (GOOGL) and Meta Platforms (META).

Celestica also has partnerships with Broadcom (AVGO), Advanced Micro Devices (AMD), Intel (INTC) and others for various products.

Twenty of the 22 analysts covering Celestica, 20 have buy or overweight ratings and the rest have hold ratings.

Five Below Stock

Five Below (FIVE) is the No. 1 discount retailer, and it is trading near all-time highs.

The stock is on pace for a 12th straight monthly gain — a stretch in which its share price has soared nearly 350%. Shares bounced Thursday from a modest pullback to the 10-week moving average and cleared a trendline with an early entry around 215. The stock fell 3% Friday amid a weak stock market.

The retail chain late Wednesday reported January-quarter adjusted earnings of $4.31 a share, a year-over-year increase of 24%. Sales also jumped 24% to $1.73 billion. Results beat analysts’ estimates. Same-store sales rose 15.4%, also above views.

The company’s outlook implied a deceleration in the second half of the year. But UBS analyst Michael Lasser still saw a bullish undercurrents.

“Importantly, it’s not benefiting from one trend. Rather, it’s seeing the fruits of its labor,” said Lasser, who raised the price target to 285 from 255. “It’s benefiting from its refreshed merchandising and marketing initiatives. As such, it continues to see broad-based strength moving into 2026.”

Chief Financial Officer Dan Sullivan said the company’s guidance is guarded because of uncertainty over the U.S. consumer. Also, the company is coming up against some tough year-ago comparisons.

Of 26 analysts who cover the company, 16 have buy or outperform ratings and the rest have hold recommendations. Analysts expect full fiscal year earnings of $8.09, a 21% increase.

Universe of S&P 500, S&P 400 And S&P 600 Stocks

To select companies for this list, IBD used a combination of FactSet data and IBD ratings.

The screening began with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. This index is a good representation of the U.S. stock market while eliminating less-liquid and lower-quality names.

The next layer of screening flagged companies showing FactSet consensus ratings of overweight or buy, the most bullish views. To further refine the list, we screened for stocks with strong analyst consensus earnings growth estimates for the current fiscal year. In the final cut, we selected stocks with high Composite and Relative Strength Ratings.

The final seven best stocks for outstanding earnings growth and estimates overlap with some Magnificent Seven stocks.

To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.

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