Best Growth Stocks to Buy for September 2nd

Zacks highlights three Zacks Rank #1 “Strong Buy” names—Montrose Environmental Group (MEG), Western Digital (WDC), and Zurn Elkay Water Solutions (ZWS)—noting analysts’ current-year EPS consensus has risen in the past 60 days (+89.2% for MEG, +13.4% for WDC, +6.7% for ZWS). The article also cites favorable valuation metrics versus peers (PEG: MEG 1.38 vs 5.34 industry; WDC 0.90 vs 2.26; ZWS 2.43 vs 5.34). Overall sentiment is modestly positive, but the piece is promotional/positioning-oriented rather than a specific earnings or policy catalyst.

Analysis

This is mostly a revision-momentum screen, not a durable fundamental shock. WDC is the only name here with real cyclical torque: if storage pricing stays firm into the next print, EPS revisions can still compound quickly, but the stock is also the most exposed to a sharp reversal if channel inventories normalize or capex pauses. MEG and ZWS are slower-burn compounds; their upgrades likely reflect project timing, mix, and municipal spend rather than a step-change in end-demand.

Second-order effects matter more than the headline implies. MEG can benefit from tighter environmental enforcement and industrial remediation spending even if broad industrial activity softens, making it a niche proxy for regulatory intensity. ZWS is rate-sensitive: easier financing and lower yields would support backlog conversion and public-infrastructure demand, but a backup in rates would compress the multiple before operating data visibly deteriorates.

The contrarian miss is that the market may be treating all three as equally strong growth stories when only WDC has meaningful upside convexity. For MEG and ZWS, the risk is that the estimate revision cycle is already halfway done, so the next leg depends on confirmation in orders and margin, not just analyst enthusiasm. Falsifiers: WDC guide-down or memory pricing rollover over the next 1-2 quarters; MEG backlog/order conversion stalling; ZWS order growth slowing while rates rise.

Key Decisions for Investors

• Tactically long WDC over the next 1-3 months, but only as a catalyst trade into earnings or storage-pricing confirmation; use tight risk controls because the bear case is a fast de-rating if demand normalizes.
• Prefer long WDC / short STX as a relative-value expression for the next quarter: WDC has more upside torque if NAND plus HDD discipline holds, while STX offers less embedded upside from a storage upcycle.
• For MEG, treat the name as a 3-6 month slow-burn long on pullbacks rather than momentum chase; if estimate revisions stop rising or project conversion slips, back away quickly.
• For ZWS, wait for a rate-led dip before adding exposure; it is more of a 6-18 month infrastructure compounder than a near-term catalyst story, and upside is capped if Treasury yields re-accelerate.
• No aggressive options structure on MEG or ZWS from this signal alone; the revision data is supportive but not strong enough to justify paying elevated vol without a clearly defined catalyst.