FRAMEWORKS / GROWTH / GROWTH LEADERS
LENS 02 · GROWTH
Growth Leaders framework, explained
IN THE TRADITION OF THE GROWTH-LEADERSHIP SIGNALS DOCUMENTED BY WILLIAM O'NEIL
Growth Leaders looks for fast, durable sales growth on high gross margins, with dilution from stock-based pay kept in check. The filing read asks whether the growth is durable and soundly financed, or bought, slowing or hollow.
What it looks for
Multi-year sales growth, high gross margins, a cap on stock-based pay, and enough public history to judge.
Whether the growth is durable and soundly financed — what MD&A says drives it, how it balances against profitability, dilution from stock-based pay, competitive position, and cash runway.
The quantitative screen looks for multi-year sales growth, high gross margins, a cap on stock-based pay, and enough public history to judge.
The AI read examines what MD&A says is driving the growth, how durable the revenue is, the balance between growth and profitability, dilution discipline, competitive position and the company’s cash runway. Growth that depends on widening losses or on stock-based pay counts against the match.
Filings it reads
Citations name the sections they rely on from these filings. Anything they do not disclose is marked unknown rather than inferred. Where a company puts its MD&A and financial statements in its annual report to shareholders instead of the 10-K, that report is read too.
| What is read | Why this framework reads it |
|---|---|
| 10-K: Business (Item 1) | What the company sells, to whom, and how it competes. |
| 10-K: Risk factors (Item 1A) | The risks the company itself says are material. |
| 10-K: MD&A (Item 7) | Management’s explanation of what drove the results. |
| 10-K: Financial statements and notes (Item 8) | The audited numbers the rest of the read is checked against. |
| Latest 10-Qs: financial statements, MD&A and risk-factor updates | Growth trends show first in the latest quarters. |
| Recent 8-K results of operations (Item 2.02) | The most recent reported quarter, often before the 10-Q. |
| Form 4 insider transactions | Insider activity alongside the growth. |
What each verdict means
A verdict describes how well a company’s filings fit this framework, as of the filings read. It is never a prediction and never an action to take.
- GEMSTONE
- The filings show fast, durable sales growth on high gross margins, with dilution kept in check and the growth soundly financed.
- GEODE
- The growth is there, but its durability or its financing is mixed or unverifiable in the filings.
- SEDIMENT
- The filings show the growth slowing, funded by widening losses, or paid for in heavy dilution.
When the filings cannot support any verdict, none is issued: the company is shown as Not scored.
What this framework misses
- The tradition also watches price and volume behavior closely. This framework reads the fundamental signals the filings report, described plainly, without the trademarked system.
- Fast growth can slow abruptly. The read covers the filings to date, not the next quarter.
- Fast growth funded by widening losses can look like leadership for a while. The read weighs it only as far as MD&A and the financials explain it.
Terms used here
Other frameworks in the growth lens
This framework can be forked in the Strategy Lab. The growth lens page compares it with the other frameworks in its lens, and the how it works page walks through a complete read. Framework titles describe the method; practitioner names appear only as attribution — no methodology here is endorsed by or affiliated with the practitioners named.