Is CARETRUST REIT INC (NYSE:CTRE) on the Verge of a Major Breakout as a Strong Growth Stock?

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if CARETRUST REIT INC (NYSE:CTRE) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted CARETRUST REIT INC showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Understanding CTRE's Growth

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. CTRE has achieved a 9 out of 10:

• The Earnings Per Share has grown by an impressive 100.00% over the past year.
• Measured over the past years, CTRE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.30% on average per year.
• Looking at the last year, CTRE shows a very strong growth in Revenue. The Revenue has grown by 36.05%.
• Measured over the past years, CTRE shows a quite strong growth in Revenue. The Revenue has been growing by 12.64% on average per year.
• Based on estimates for the next years, CTRE will show a very strong growth in Earnings Per Share. The EPS will grow by 27.34% on average per year.
• The Revenue is expected to grow by 23.09% on average over the next years. This is a very strong growth
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Looking at the Health

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. CTRE scores a 5 out of 10:

• CTRE has an Altman-Z score of 6.30. This indicates that CTRE is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 6.30, CTRE belongs to the best of the industry, outperforming 99.22% of the companies in the same industry.
• CTRE has a Debt/Equity ratio of 0.14. This is a healthy value indicating a solid balance between debt and equity.
• CTRE has a better Debt to Equity ratio (0.14) than 99.22% of its industry peers.
• CTRE's Current ratio of 1.94 is fine compared to the rest of the industry. CTRE outperforms 76.74% of its industry peers.
• CTRE has a Quick ratio of 1.94. This is in the better half of the industry: CTRE outperforms 76.74% of its industry peers.

Looking at the Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. CTRE scores a 8 out of 10:

• CTRE's Return On Assets of 3.63% is amongst the best of the industry. CTRE outperforms 85.27% of its industry peers.
• With a decent Return On Equity value of 4.29%, CTRE is doing good in the industry, outperforming 66.67% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 4.56%, CTRE belongs to the best of the industry, outperforming 84.50% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for CTRE is above the industry average of 3.17%.
• The Profit Margin of CTRE (42.07%) is better than 93.02% of its industry peers.
• CTRE's Profit Margin has improved in the last couple of years.
• CTRE's Operating Margin of 64.83% is amongst the best of the industry. CTRE outperforms 99.22% of its industry peers.
• In the last couple of years the Operating Margin of CTRE has grown nicely.
• With an excellent Gross Margin value of 98.07%, CTRE belongs to the best of the industry, outperforming 98.45% of the companies in the same industry.

Why is CTRE a setup?

ChartMill also provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, CTRE has a 7 as its setup rating:

CTRE has an excellent technical rating and 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. There is a support zone below the current price at 28.79, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of CTRE contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of CTRE

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.