Why ASPEN TECHNOLOGY INC (NASDAQ:AZPN) could fit Mark Minervini’s high-growth criteria

In this article we will dive into ASPEN TECHNOLOGY INC (NASDAQ:AZPN) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ASPEN TECHNOLOGY INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

AZPN passes the Minervini Trend Template check!

AZPN checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

High Growth Assessment of AZPN

ChartMill employs its own High Growth Momentum Rating (HGM) system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth and profitability factors, such as EPS and revenue growth, as well as accelleration, surprises and revision history. AZPN has earned a 4:

Explosive Earnings Growth

• AZPN has shown positive momentum in its earnings per share (EPS) on a quarter-to-quarter (Q2Q) basis, with a 50.36% increase. This reflects the company's successful execution of its business strategies and its commitment to delivering improved financial results.
• AZPN shows accelerating EPS growth: when comparing the current Q2Q growth of 50.36% to the previous quarter Q2Q growth of -26.72%, we see the growth rate improving.
• AZPN has experienced 22.03% growth in EPS over a 12 month period, demonstrating its ability to generate sustained and positive earnings momentum.
• AZPN has demonstrated strong q2q revenue growth of 18.04%, suggesting a favorable trend in the company's financials and indicating the potential for continued expansion.
• Accelerating Sales growth for AZPN: the current Q2Q growth of 18.04% exceeds the previous quarter Q2Q growth of -13.41%.
• Analysts' average next Quarter EPS Estimate for AZPN has witnessed a 7.73% change in the last 3 months, underscoring the evolving market expectations towards the company's EPS prospects.
• AZPN has exceeded EPS estimates 3 times in the last 4 quarters, demonstrating its ability to outperform market expectations. This trend highlights the company's strong financial performance and its potential for future growth.

Profitability & Financial Strength

• The operating margin of AZPN has seen steady growth over the past year, signaling improved profitability. This trend indicates the company's effective cost management and its ability to generate higher returns.
• AZPN has experienced notable growth in its free cash flow (FCF) over the past year, signaling improved cash generation and strong financial performance. This growth suggests the company's ability to generate excess cash for reinvestment or shareholder returns.
• With a current Debt-to-Equity ratio at 0.0, AZPN showcases its disciplined capital structure. The company's prudent management of debt obligations contributes to its financial stability and long-term sustainability.

Market Strength

• AZPN has achieved an impressive Relative Strength (RS) rating of 90.57, showcasing its ability to outperform the broader market.

How do we evaluate the setup for AZPN?

ChartMill incorporates a Setup Rating in its analysis, which measures the extent of consolidation in a stock over recent days and weeks. This rating, ranging from 0 to 10, is updated daily and takes into account multiple short-term technical indicators. The current setup rating for AZPN is 8:

Besides having an excellent technical rating, AZPN also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. Another positive sign is the recent Pocket Pivot signal.

Check the latest full technical report of AZPN for a complete technical analysis.

More like this

It looks like ASPEN TECHNOLOGY INC meets the Minervini criteria. More high growth momentum breakout stocks can be found in our High Growth Momentum + Trend Template screen.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.