Zacks Equity Research
5 min read
For Immediate Release
Chicago, IL – September 11, 2026 – Stocks in this week’s article are Wayfair W, Alarm.com ALRM, ATI INC ATI, Farmers & Merchants Bancorp FMAO and Amerant Bancorp AMTB.
5 Top-Ranked Efficient Stocks with Strong Growth Potential
A company’s efficiency level reflects how effectively it uses resources such as labor, capital and assets to generate profits and drive business growth. It is a key indicator of a company’s financial strength, operational performance and ability to generate sustainable profits. Companies with higher efficiency levels usually manage their operations better, reduce costs and generate stronger returns, making them more likely to deliver solid long-term stock performance.
However, at times, it becomes difficult to measure the efficiency level of a company. This is why one must consider the popular efficiency ratios listed below while selecting stocks.
The stocks of Wayfair, Alarm.com, ATI INC, Farmers & Merchants Bancorp and Amerant Bancorp made it through the screening process.
These efficiency ratios are:
Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio, or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivables or that it has quality customers.
Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient.
Inventory Turnover: The ratio of the 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low level of inventory compared to COGS, a low value indicates that the company is facing declining sales, which has resulted in excess inventory.
Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers. You can see the complete list of today’s Zacks #1 Rank stocks here.
