CARETRUST REIT INC (NYSE:CTRE) Shows Strong Growth Momentum and Bullish Technical Setup

The search for high-growth momentum stocks with favorable technical setups often leads investors to refined screening methods. One method uses ChartMill's own ratings to find companies displaying both solid fundamental growth traits and encouraging technical patterns. This method concentrates on securities with High Growth Momentum Ratings above 4, pointing to strong earnings and sales momentum, together with Technical Ratings and Setup Ratings above 7, indicating both good technical condition and consolidation patterns that might come before possible breakouts.

Growth Momentum Fundamentals

CARETRUST REIT INC (NYSE:CTRE) displays notable growth traits that add to its High Growth Momentum Rating of 7. The company's earnings performance reveals clear speed-up across several periods, a main part in growth momentum investing.

• EPS Growth Metrics:

  • Quarterly EPS growth of 400% in the most recent quarter
  • 59.1% growth in the previous quarter
  • 108.5% growth over the trailing twelve months
  • 70.8% growth in the last reported fiscal year

• Revenue Expansion:

  • Quarterly sales growth of 55.3% in the most recent quarter
  • 53.2% growth in the previous quarter
  • 50.8% revenue growth over the trailing twelve months
  • 36.1% growth in the last reported fiscal year

The speed-up in both earnings and sales growth matches the main ideas of high growth momentum investing, where investors look for companies showing enlarging business fundamentals. The steady upward changes in analyst estimates further back the positive momentum story, with next-year EPS estimates going up 1.9% and revenue estimates going up 6.1% over the past three months.

Technical Strength Assessment

CTRE's technical profile shows clear strength, getting a Technical Rating of 8 from ChartMill. The stock displays several positive technical features that growth investors often look for when taking positions.

• Trend Analysis:

  • Both short-term and long-term trends are positive
  • Trading near 52-week highs at $35.17
  • Doing better than 90% of stocks in the Diversified REITs industry
  • Showing better performance than 72% of all stocks year-to-date

• Moving Average Alignment:

  • Price trading above all main moving averages (20, 50, 100, and 200-day)
  • All moving averages pointing upward
  • Steady alignment hinting at continued bullish momentum

The technical strength is especially noticeable given the present market conditions, with the S&P 500 showing positive trends in both short-term and long-term periods. CTRE's performance matches the wider market while showing sector leadership.

Setup Quality Analysis

With a Setup Rating of 7, CTRE presents a possibly good risk-reward situation for momentum investors. The stock has been trading in a set range between $32.79 and $35.68 over the past month, now placed near the upper edge of this consolidation area.

The technical analysis report finds several support levels that offer possible downside protection:

• Main support zone between $32.89 and $34.39
• Next support at $31.75 from daily trend lines
• More support at $27.81 and $24.90 from weekly timeframes

While the setup quality is graded as medium because of recent price swings, the consolidation pattern hints the stock may be gathering energy for a possible breakout above the noted resistance zone between $35.49 and $35.50.

Investment Considerations

For growth momentum investors, CTRE represents an interesting case where solid fundamental growth meets technical strength and a forming setup pattern. The company's marked betterment in earnings growth, joined with enlarging profit margins and positive estimate changes, creates a notable fundamental setting. At the same time, the technical view suggests the stock keeps bullish features while nearing possible breakout levels.

The mix of these factors makes CTRE worth notice for investors using high growth momentum plans. The stock's place near resistance with set support levels below gives a structure for possible entry and risk management choices.

Discover more high growth momentum stocks with quality technical setups using our specialized screening tool.

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results.