How does EMBRAER SA-SPON ADR (NYSE:ERJ) stack up against Mark Minervini’s strategy?

Growth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if EMBRAER SA-SPON ADR (NYSE:ERJ) is suited for growth investing. Investors should of course do their own research, but we spotted EMBRAER SA-SPON ADR showing up in our Minervini growth screen, so it may be worth spending some more time on it.

Does ERJ pass the Minervini Trend Template check?

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for ERJ:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

High Growth Assessment of ERJ

To evaluate a stock's growth potential, ChartMill utilizes a High Growth Momentum Rating (HGM) on a scale of 0 to 10. This assessment considers various growth and profitability aspects, like EPS and revenue growth, accelleration, surprises and revisions. ERJ has achieved a 6 out of 10:

Explosive Earnings Growth

• The recent financial report of ERJ demonstrates a 650.0% increase in quarterly earnings compared to the previous quarter. This growth indicates positive momentum in the company's financials and suggests a promising upward trend
• Accelerating EPS growth for ERJ: the current Q2Q growth of 650.0% exceeds the previous quarter Q2Q growth of 57.14%.
• The 1-year EPS growth of ERJ (6.0K%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• The recent q2q revenue growth of 31.77% of ERJ showcases the company's ability to generate increasing revenue in a short period, reflecting its positive growth trajectory.
• ERJ shows accelerating Sales growth: when comparing the current Q2Q growth of 31.77% to the previous quarter Q2Q growth of 23.38%, we see the growth rate improving.
• 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

• ERJ has experienced notable growth in its operating margin over the past year, reflecting improved operational performance. This growth suggests the company's ability to generate higher profits from its core business activities.
• ERJ has achieved an impressive Return on Equity (ROE) of 15.22%, showcasing its ability to generate favorable returns for shareholders.
• A Debt/Equity ratio of 0.84 suggests that ERJ is managing its debt levels responsibly.

Market Strength

• The Relative Strength (RS) of ERJ has consistently been strong, with a current 97.85 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

Why is ERJ a setup?

ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. ERJ currently has a 7 as setup rating:

ERJ has an excellent technical rating and 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.

For an up to date full technical analysis you can check the technical report of ERJ

More like this

Our High Growth Momentum + Trend Template screen will find you more ideas which meet the Minervini criteria.

Keep in mind

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.