Exploring EMBRAER SA-SPON ADR (NYSE:ERJ)'s high growth characteristics.

Our stockscreener has identified a possible breakout setup on EMBRAER SA-SPON ADR (NYSE:ERJ). This occurs when the stock consolidates following a significant upward movement. While the breakout outcome cannot be guaranteed, it may be worth monitoring NYSE:ERJ for potential opportunities.

What is the technical picture of ERJ telling us.

ChartMill employs a sophisticated system to assign a Technical Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple technical indicators and properties.

Overall ERJ gets a technical rating of 10 out of 10. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, ERJ is showing a nice and steady performance.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, ERJ did better than 97% of all other stocks. On top of that, ERJ also shows a nice and consistent pattern of rising prices.
• ERJ is part of the Aerospace & Defense industry. There are 65 other stocks in this industry. ERJ outperforms 95% of them.
• ERJ is currently trading near its 52 week high. This is a good sign, certainly because the S&P500 Index is not trading near new highs.
• ERJ is currently showing a bull flag pattern! A bull flag pattern occurs when prices pull back slightly after a strong rise up. This may be a nice opportunity for an entry.
• Volume is considerably higher in the last couple of days, which is what you like to see during a strong movement up.

Check the latest full technical report of ERJ for a complete technical analysis.

How do we evaluate the setup for ERJ?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, ERJ has a 7 as its setup rating, indicating its current consolidation status.

Besides having an excellent technical rating, ERJ also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. 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 50.59, a Stop Loss order could be placed below this zone.

Exploring ERJ's Growth

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. ERJ boasts a 6 out of 10:

Earnings Momentum

• The earnings per share (EPS) of ERJ have shown positive growth on a quarter-to-quarter (Q2Q) basis, with a 650.0% increase. This reflects the company's ability to improve its profitability over time.
• The earnings per share (EPS) growth of ERJ is accelerating: the current Q2Q growth of 650.0% is above the previous quarter Q2Q growth of 57.14%. Earnings momentum and acceleration are key for high growth systems.
• Over the past year, ERJ has demonstrated 6.0K% growth in EPS, signifying its positive financial trajectory and potential for future profitability.
• With impressive quarter-to-quarter (Q2Q) revenue growth of 31.77%, ERJ showcases its ability to generate increased sales and revenue. This growth indicates the company's strong customer demand and its effective business strategies.
• The sales growth of ERJ is accelerating: the current Q2Q growth of 31.77% is above the previous quarter Q2Q growth of 23.38%. Sales momentum and acceleration are key for high growth systems.
• Sales acceleration happened 3 quarters in a row.
• The average next Quarter EPS Estimate by analysts was adjusted by 7.8%, reflecting the evolving market expectations for the company's EPS growth.

Financial Strength & Profitability

• The operating margin of ERJ has seen steady growth over the past year, signaling improved profitability. This trend indicates the company's effective cost management and its ability to generate higher returns.
• The Return on Equity(ROE) of ERJ is 15.22%, which is a strong number. This indicates the company's ability to generate favorable returns for shareholders and reflects its effective management of resources.
• With a Debt/Equity ratio of 0.84, ERJ maintains a solid financial position with controlled leverage.

Strong Market Performance

• ERJ has achieved an impressive Relative Strength (RS) rating of 97.85, showcasing its ability to outperform the broader market. This strong performance positions EMBRAER SA-SPON ADR as an attractive stock for potential price appreciation.

Our High Growth Momentum Breakout screen will find you more ideas suited for high growth momentum breakouts.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.