CARETRUST REIT INC (NYSE:CTRE) Emerges as a High-Growth Momentum Stock with Strong Earnings and Technical Setup

Investors looking for high-growth momentum stocks often focus on companies showing strong earnings growth, positive revisions, and rising profit margins, qualities that usually lead to continued price gains. The ChartMill High Growth Momentum Rating combines these elements into one score, making it easier to spot stocks with solid short-term earnings trends. When paired with strong technical patterns, like tight trading ranges near highs with clear support levels, these stocks offer attractive opportunities. CARETRUST REIT INC (NYSE:CTRE) stands out as a strong candidate, scoring well on both earnings momentum and technical strength.

Why CTRE Matches the High Growth Momentum Criteria

The High Growth Momentum Rating assesses key elements of earnings and sales growth, along with momentum signals. CTRE earns a 7 out of 10 on this measure, backed by the following details:

• Solid Earnings Growth:

  • TTM EPS Growth: 86.27%
  • Recent Quarterly EPS Growth: 59.09% (current quarter), 45.45% (prior quarter), and a notable 162.5% two quarters ago.
  • Forward Estimates: Analysts expect a 397.86% YoY EPS growth for the next quarter, pointing to ongoing momentum.

• Revenue Growth:

  • TTM Revenue Growth: 43.26%
  • Quarterly Sales Growth: 33.91% (current quarter), 45.55% (prior quarter), and 38.48% two quarters earlier.

• Better Profit Margins:

  • The most recent quarter’s profit margin is 67.91%, up from 59.78% in the previous quarter and well above the 15.48% reported three quarters ago.

Although free cash flow growth is still negative, the company’s earnings trend, margin improvement, and rising revenue estimates point to better operational performance, a key factor for momentum investors.

Technical Strength and Setup Quality

Beyond financials, CTRE shows strong technical signals, as highlighted in the ChartMill Technical Report:

• Technical Rating (9/10): The stock is in a clear uptrend across short and long-term periods, beating 89% of its peers in the Diversified REITs sector.
• Setup Rating (8/10): Prices have traded between $29.91 and $31.50 over the past month, reducing volatility and forming a clear support zone near $31.08. This tight range hints at a possible breakout.
• Support Levels: Multiple trendlines and moving averages cluster around $29.81–$31.08, offering a logical area for stop-loss orders.

The report suggests a potential entry at $31.48 (above the 10-day high) with a stop-loss at $30.20, providing a balanced risk-reward setup.

Why These Factors Are Important

High-growth momentum strategies, such as those inspired by CANSLIM or Minervini, focus on:

1. Earnings Growth: Fast EPS and sales growth indicate strong institutional interest.
2. Technical Strength: Stocks in uptrends with little resistance often keep outperforming.
3. Breakouts from Tight Ranges: Narrow trading ranges frequently lead to the next upward move.

CTRE’s mix of rising earnings, improving margins, and a high-probability technical pattern fits this strategy well.

Find More High-Growth Momentum Opportunities

For investors searching for similar setups, the High Growth Momentum Breakout Setups Screen filters for stocks with strong growth ratings and favorable technical patterns.

Disclaimer: This analysis is not investment advice. Always do your own research and use risk management strategies before trading.