These S&P 500 companies have also shown improving profit margins and free cash flow this earnings season
These are three of 22 companies in the S&P 500 passing a screen for high sales growth, along with improving profit margins and free cash flow.
Every earnings season brings superlative headlines as some companies report blowout sales results, while the norm is that most companies report "beats" of consensus earnings estimates. But looking under the surface can highlight other trends that may be more important to long-term investors.
We screened companies in the S&P 500 SPX to list those showing the highest revenue growth rates while also expanding their gross profit margins and operating margins, which are measures of the profitability of each dollar of sales. For the third quarter, amid concerns about companies spending so much on AI-infrastructure buildout, we also looked at the companies' free cash flow.
Here's an example of a rapid grower with cash-flow concerns. On Tuesday after the market close, CoreWeave (CRWV) reported third-quarter revenue that jumped 168% from a year ago to $3.66 billion. The stock was up more than 15% in premarket trading early Wednesday. Through Tuesday, the stock was down 32% for 2026 and 65% from its May 6 intraday high. Investors have been concerned about the cloud-computing services provider's high debt, which CoreWeave CEO Michael Intrator addressed on Tuesday when discussing a plan to lower borrowing costs.
CoreWeave isn't a component of the large-cap U.S. benchmark index. But CoreWeave wouldn't have passed the screen anyway, because its third-quarter gross profit margin narrowed from the year-earlier quarter and cash flow was negative.
The S&P 500 earnings-season screen could be a useful tool to research individual stocks if you want to incorporate indicators of quality for an initial list of companies with soaring revenue.
S&P 500 earnings-season screen
Through Tuesday, 90% of the S&P 500 had reported results for fiscal quarters ended Aug. 15 or later.
Here's how we screened the S&P 500 using data provided by FactSet:
-- Starting with the most recently reported results available from FactSet, we narrowed the 500 stocks to 285 companies for which quarterly gross profit margins had widened from a year earlier. A company's gross margin is its net sales minus the cost of goods or services sold, divided by sales. Net sales are sales minus returns and discounts, such as coupons. The cost of goods or services sold includes the actual expenses when making the items or providing the services. Gross margin measures pricing power and core efficiency.
-- We cut the list of 285 companies with gross margins that improved from a year ago to 240 that had also improved operating margins. A company's net operating margin incorporates more overhead and other expenses that aren't tied directly to the production of goods and services. It can be summarized as earnings before interest and taxes, divided by sales.
Profit margins vary between industries. For example, a mature software company may have very wide profit margins, while an industry requiring heavy capital investment, such as industrial equipment, will likely have lower profit margins.
And some industries have their own particular measures of profitability, which means gross aren't available for most banks, insurers and other financial-services companies
To factor in the increased spending on AI and data centers, we cut the remaining list of 240 companies to 151 with positive free cash flow per share for the most recent reported quarter, as well as increased free cash flow per share from the year-earlier quarter. A company's free cash flow (FCF) is its remaining cash flow after capital expenditures. This is money that can fund expansion, acquisitions, dividend increases, stock buybacks or be used for other corporate purposes.
Among the remaining 151 companies, these 22 showed increases in quarterly sales per share of at least 50% from a year earlier.
Company Increase in sales per share Gross margin Gross margin - year-earlier quarter Op. margin Op. margin - year-earlier quarter FCF per share FCF per share - year-earlier quarter Micron Technology 373% 86.76% 44.97% 86.51% 51.93% $28.65 $0.06 Sandisk 362% 85.01% 29.77% 79.98% 9.88% $40.97 $2.94 Texas Pacific Land 304% 86.59% 84.54% 84.35% 80.78% $2.58 $0.66 TKO Group 226% 57.21% 49.21% 37.99% 29.13% $6.07 $1.99 Nvidia 108% 74.98% 72.42% 67.41% 62.27% $0.88 $0.55 Palantir Technologies 96% 83.43% 82.45% 47.20% 33.80% $0.46 $0.19 Broadcom 84% 67.46% 64.08% 61.79% 52.04% $2.80 $1.45 Lumentum Holdings 82% 49.92% 31.21% 34.04% 14.46% $0.37 -$0.23 Marathon Petroleum 77% 20.76% 7.52% 20.29% 7.46% $34.30 $5.47 Teradyne 71% 58.65% 57.95% 33.73% 23.67% $1.44 $0.01 Amphenol 64% 39.26% 38.09% 33.08% 31.16% $0.63 $0.47 Vertiv 60% 36.47% 35.92% 26.04% 23.27% $1.67 $1.12 Monolithic Power Systems 59% 55.35% 55.11% 31.31% 28.34% $4.48 $4.10 AppLovin 58% 88.36% 86.57% 80.49% 79.86% $4.27 $3.09 Seagate Technology 57% 57.34% 39.44% 50.65% 29.63% $6.38 $1.89 Valero Energy 56% 20.79% 5.51% 21.57% 7.32% $23.38 $5.51 Quanta Services 56% 15.14% 14.19% 11.49% 10.21% $7.77 $2.78 Lam Research 56% 52.30% 50.43% 41.44% 36.26% $2.58 $1.26 Comfort Systems USA 55% 24.31% 24.19% 17.73% 16.89% $22.74 $14.65 Reddit 54% 91.06% 90.36% 29.70% 24.35% $1.80 $0.90 Western Digital 52% 58.00% 43.44% 50.22% 31.23% $3.59 $1.59 Phillips 66 52% 17.62% 5.55% 17.19% 5.04% $16.55 $1.57 Source: FactSet
We used sales per share for the screen, rather than raw revenue, because the per-share figures incorporate dilution to the share count caused by the issuance of stock. The sales-per-share figures also incorporate declines in the companies' share counts from stock repurchases. A declining share count will also boost earnings per share.
Nvidia, whose figures on the table are for the fiscal quarter ended July 26, was one of the early earnings reporters that made the list, since their results of their current quarter, which runs through October, aren't released until Nov. 17. The other is Broadcom (AVGO), as their quarter ended on Aug. 2.
These three companies in the S&P 500 would have made the list with high growth rates and improved profit margins, but were excluded because of the requirement for positive and improved free cash flow: