For investors aiming to achieve notable price increases, a plan that joins solid fundamental expansion with positive technical formations can be an effective tactic. This process requires first finding firms with sturdy and quickening financial results, shown by rising revenues, earnings, and good profitability, to create a firm business base. The next step uses technical study, searching for shares that are stabilizing after a price change and displaying formations that hint at a possible advance from that stability. When a share with attractive growth basics also shows a promising technical arrangement, it can indicate a meeting of momentum, possibly giving a good chance to enter for a continued rise.
COMMVAULT SYSTEMS INC (NASDAQ:CVLT) offers a present example for this joined study. The data protection and cyber resilience firm works in the necessary and increasing field of enterprise data management, an area with a big target market and obvious expansion possibility as data amounts grow quickly worldwide.
Fundamental Growth Power
The heart of the growth investment case for CVLT is backed by its fundamental numbers. According to its fundamental analysis report, the firm gets a good Growth Rating of 8 out of 10. This grade shows notable past results and hopeful future projections, which are key for spotting shares that can do better than others.
- Past Results: CVLT has shown effective operational performance.
- Revenue increased by 22.02% over the past year, with a firm 3-year average yearly growth rate of 8.21%.
- Earnings Per Share (EPS) growth is more notable, rising by 19.69% last year and by an average of 20.11% yearly over recent years.
- Future Projections: The expansion path is planned to keep going.
- Analysts predict EPS will increase by an average of 14.32% yearly in the next years.
- Revenue is projected to speed up, with estimates pointing to almost 10% yearly growth, showing the firm's market plans are working.
Beyond only growth, CVLT displays basic strength in other important areas. It has a Profitability Rating of 7, having industry-top margins, including a Gross Margin above 81%, and very good returns on equity. Its Financial Health Rating of 6 is backed by good liquidity, though investors should see its use of debt financing as an item to watch. This mix of solid growth, top profitability, and acceptable financial health matches the qualitative needs for a winning growth share, like working in a growing market (cyber resilience) and keeping competitive edges through its platform.
Technical Arrangement for a Possible Advance
While the fundamentals give the "why," the technical view gives clues about the "when." CVLT's technical analysis report shows a different short-term picture but points out a particular chance. The share is given a low total Technical Rating because of its negative short and long-term directions, having fallen notably from its 52-week highs along with a wider adjustment in the software field.
However, the report notes a significant Setup Rating of 7. This means that, even with the bad recent performance, the price movement has started to create a possibly positive formation.
- Stability and Lowered Volatility: After its drop, the share's price has been stabilizing recently, with volatility going down. This often shows a time of balance where selling force lessens and the share forms a foundation.
- Clear Resistance Area: A distinct and major resistance area has been formed just above the present trading price, between about $123.96 and $124.33. This area is strengthened by key moving averages.
- The Arrangement Idea: The plan noted by the technical report proposes that a clear move above this set resistance area could show a change in momentum. Such an action, particularly when combined with the basic fundamental growth story, might offer a planned entry chance for investors who think the long-term growth idea is still valid.
Valuation Setting
A growth share must also be looked at through valuation. CVLT's Valuation Rating is a middle 4. Its P/E ratio seems high plainly but is actually less expensive than many others in its software industry group. More significantly, the firm's top profitability and solid projected earnings growth give a reason for its higher price. For growth investors, paying a fair price for speeding future earnings is often a thought-out part of the plan, if the growth path is believable and can last.
Conclusion
COMMVAULT SYSTEMS INC shows a notable meeting of elements for investors using a growth-with-technical-arrangement plan. The firm displays the fundamental signs of a solid growth share: speeding revenues, strong EPS growth, and top profitability inside an important, growing market. Technically, while the share has been unpopular, it is now making a stability formation with a set resistance level above. A future move above this level could be seen as a technical agreement that matches the fundamental growth story, possibly showing a change in momentum.
This particular mix of fundamental and technical elements is what specific screens are made to find. You can locate more shares that match this "Strong Growth Stocks with Good Technical Arrangement" description by using the pre-built screen on ChartMill.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The information presented is based on data provided and should not be the sole basis for any investment decision. Investing in stocks involves risk, including the potential loss of principal. You should conduct your own thorough research and consider consulting with a qualified financial advisor before making any investment decisions.
