Arteris Inc (NASDAQ:AIP) Fits Minervini’s High-Growth Momentum Trend Template

Arteris Inc (NASDAQ:AIP), A High-Growth Momentum Candidate Matching Minervini’s Trend Template

Mark Minervini’s trend-following strategy looks for stocks showing strong upward movement, backed by both technical and fundamental factors. The method highlights stocks in clear uptrends (Stage 2), with improving earnings, revenue growth, and strong performance compared to peers. Pairing this with a High Growth Momentum (HGM) filter helps find companies with both price strength and business growth.

Arteris Inc (NASDAQ:AIP) stands out as a stock that fits these ideas. Here, we explore why AIP matches Minervini’s framework and why it might interest growth-focused investors.

Technical Strength: Matching the Trend Template

Minervini’s Trend Template demands stocks meet several moving average and price performance standards to confirm a solid uptrend. AIP meets many of these:

• Price Above Key Moving Averages:
  • Current price ($9.05) is higher than the 50-day SMA ($8.81), 150-day SMA ($8.67), and 200-day SMA ($8.56).
  • The 50-day SMA is above both the 150-day and 200-day SMAs, a positive sign.
• Rising Averages:
  • The 200-day SMA is increasing, confirming a long-term upward trend.
• Relative Strength:
  • AIP’s ChartMill Relative Strength (CRS) of 86.55 shows it beats 86% of all stocks, a key trait of leading stocks.
• Price Performance:
  • The stock is 65.8% above its 52-week low ($5.46) and within 28.4% of its 52-week high ($12.64), meeting Minervini’s rule of being at least 30% above lows and within 25% of highs.

These points suggest AIP is in a Stage 2 uptrend, a core part of Minervini’s strategy.

Fundamental Growth Momentum

Beyond technicals, Minervini stresses earnings and revenue growth as drivers for continued price gains. AIP shows several high-growth traits:

• Earnings Growth:
  • EPS grew 40% YoY last quarter, with earlier quarters showing 44.4% and 33.3% growth, reflecting steady progress.
  • Over the past year, EPS growth is 34.5%, supporting positive momentum.
• Revenue Growth:
  • Last quarter revenue rose 27.7% YoY, with the prior quarter up 23.9%.
  • Full-year revenue growth has been consistent at 7.6% (FY) and 6.5% (FY-1), with a stronger 33.1% growth two years ago.
• Estimate Revisions & Beats:
  • AIP has exceeded EPS estimates in all of the last four quarters, with an average beat of 16.4%.
  • Revenue beats happened in three of the last four quarters.

While profitability is still negative (EPS TTM: -$0.38), free cash flow has improved notably (+109% YoY), indicating better operational efficiency.

Technical Analysis Summary

ChartMill’s technical report gives AIP a rating of 7/10, noting:

• A long-term uptrend but short-term neutral movement.
• Strong relative strength (beating 76% of software industry peers).
• Support near $9.02 and $8.81-8.85, with resistance at $9.06-9.09 and $9.83.
• The setup rating (3/10) suggests waiting for a pullback before buying, as recent swings make the ideal entry less clear.

Conclusion

Arteris Inc makes a strong case for growth investors, fitting Minervini’s trend-following approach through its technical strength and earnings growth. While recent volatility calls for patience, its underlying growth and relative strength make it worth monitoring.

For more high-growth momentum stocks matching Minervini’s criteria, check our High Growth Momentum + Trend Template screen.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research or consult a financial advisor before making investment decisions.