CareTrust REIT Inc (NYSE:CTRE) Combines Accelerating Growth with Bullish Technical Setup

For investors aiming to achieve substantial price gains, a systematic method that combines core business strength with well-timed chart signals can be an effective plan. One such technique involves searching for stocks with powerful expansion that also display encouraging technical breakout formations. The reasoning has two parts: first, the business evaluation finds firms with solid and quickening profit and sales expansion, firm earnings, and sound financials, the driver for extended-term price gains. Second, the chart study tries to find a good entry moment, searching for stocks that are pausing after a rise and displaying indications of continuing their upward path. This merging of a powerful core company and a positive price pattern seeks to better the chance of a profitable investment.

CareTrust REIT Inc (NYSE:CTRE) recently appeared from a search made to locate precisely this mix. As a real estate investment trust concentrated on healthcare properties, its choice might at first look unexpected for an "expansion" plan, but a more detailed examination of its business health tells another tale.

Fundamental Expansion Driver

The central attraction of CTRE is found in its outstanding and quickening expansion measures, which are the main requirement for this plan. According to its fundamental analysis report, CareTrust receives a high-level Expansion Rating of 9 out of 10. This grade is powered by notable results both from earlier periods and the anticipated future.

• Strong Recent Expansion: Over the last year, the firm announced a 90.28% increase in Earnings Per Share (EPS) and a 59.24% rise in Revenue. This is not an isolated incident; the longer-term yearly expansion rates are also good at 11.30% for EPS and 12.64% for Revenue.
• Quickening Pace: Importantly, the expansion pace is quickening. Experts forecast that EPS will expand by an average of 26.77% each year in the next few years, with Revenue predicted to increase 27.93% per year, rates that exceed the already sound historical patterns.
• Earnings and Sound Base: Good expansion is most lasting when supported by a stable operation. CTRE backs its expansion with a high Earnings Rating of 8, having sector-leading margins, including a Gross Margin of 99.38% and a Profit Margin of 60.84%. Its Financial Soundness Rating is a firm 6, described by a very manageable debt-to-equity ratio of 0.22 and good cash positions, suggesting it has the fiscal strength to support its growth.

This business profile is exactly what the search plan looks for: a firm not only expanding, but doing so at a quickening speed while keeping high earnings and a clear balance sheet.

Technical Formation for a Possible Entry

While business health gives the "reason," chart study gives the "time." CTRE’s technical analysis report gives a good total rating of 8 and, more significantly for this plan, a high Formation Rating of 9. This implies the stock’s price movement is creating a formation that might come before a new upward phase.

• Pause Within a Path: The stock is in a clear extended-term positive path but has lately been moving sideways in a band between about $35.83 and $38.32 over the last month. This kind of pause after a prior rise is a standard formation where a stock builds energy.
• Important Barrier and Floor: The chart study notes a clear barrier zone just above the present price, around $37.71 to $37.77. A clear move above this point might indicate the finish of the pause and the start of a new breakout. On the other hand, a strong floor exists near $36.49, giving a sensible zone for a stop-loss order to control risk.
• Supportive Trading Activity: The report also mentions a recent "Pocket Pivot" signal, which is a price increase on greater trading volume than any down volume day in the previous two weeks. This can be an early indication of professional buying, adding support to the possibility of an upward move.

This chart view matches the plan’s aim of finding strong business firms at a time when their price formations suggest building force and a clear, lower-risk entry point.

Valuation Background

With high expansion often comes a higher price. CTRE’s Valuation Rating is a middle 4. Its P/E ratio is nearly aligned with the wider S&P 500. However, when expansion is considered through the PEG ratio, the price seems more acceptable. The excellent earnings and quickening expansion rate might support its present market price for investors focused on future growth rather than current fixed measures.

A Candidate for More Study

CareTrust REIT Inc presents an interesting example of a stock that fits strict dual requirements. It shows the effective profit and sales quickening business investors look for, all while displaying a technical price formation that traders monitor for possible breakout chances. The mix suggests a firm with good operational force that might be set for its next step upward.

Interested in finding other stocks that mix strong expansion with encouraging technical formations? You can perform the same search using our Strong Growth Stock Technical Setups Screener.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The information presented on CareTrust REIT Inc (CTRE) is based on data provided and should not be the sole basis for making an investment decision. Always conduct your own thorough research and consider your individual financial situation and risk tolerance before investing. Past performance is not indicative of future results.