The search for high-growth stocks often involves a dual approach: identifying companies with strong fundamental momentum and ensuring they are in a technically sound uptrend. One method that combines these disciplines is the strategy popularized by trader Mark Minervini, which uses a specific Trend Template to filter for stocks showing powerful, stage-two advances. This template enforces strict criteria on moving averages, price proximity to highs, and relative strength to confirm a stock is in a defined uptrend with institutional support. When this technical base is paired with a screen for high-growth momentum, focusing on accelerating earnings, revenue, and positive analyst revisions, it can identify companies that are not only growing quickly but are also being bought by the market. FIGS INC-CLASS A (NYSE:FIGS) results from such a combined screening process, presenting a case study in aligning solid business performance with a constructive chart pattern.
Technical Alignment with the Minervini Trend Template
The Minervini Trend Template is made to filter out stocks in weak or basing phases, focusing only on those showing clear, multi-timeframe strength. A review of FIGS shows it meets the core technical criteria, which are important for confirming a stock is in a lasting stage-two uptrend and not just having a temporary bounce.
- Moving Average Alignment: The stock's price ($14.22) trades above all key simple moving averages (SMAs), the 50-day ($13.42), 150-day ($10.71), and 200-day ($9.63). Furthermore, the 50-day SMA is above the 150-day and 200-day SMAs, and the 150-day is above the 200-day. This sequential order indicates a strong, defined uptrend across short, intermediate, and long-term timeframes.
- Price Position vs. 52-Week Range: FIGS trades about 278% above its 52-week low of $3.77, far exceeding the template's 30% threshold and showing powerful recovery momentum. At the same time, it trades within 19% of its 52-week high of $17.48, meeting the requirement to be within 25% of a high. This nearness to new highs suggests the stock is acting as a market leader.
- Relative Strength: With a ChartMill Relative Strength (CRS) score of 96.91, FIGS performs better than nearly 97% of all stocks over the past year. High relative strength is a key part of the Minervini approach, as it finds market leaders that tend to draw continued institutional buying during bullish phases.
Fundamental Momentum for High-Growth Investors
While the Trend Template confirms a healthy chart, the "high growth momentum" aspect of the screen looks at the fundamental engine driving the price action. For FIGS, the underlying financial metrics show a company seeing a notable increase in profitability.
- Strong Earnings Growth: The most notable figures are in earnings per share (EPS). Year-over-year EPS growth for the trailing twelve months is at 850%. Even more notable is the sequential increase visible in recent quarters, with the latest quarter showing 900% growth compared to the same period last year. This kind of sharp earnings growth is a primary driver that draws growth-focused investors and can support continued price gains.
- Positive Estimate Revisions: Analyst sentiment is a strong trailing indicator. The average estimate for FIGS's next-year EPS has been moved upward by over 105% in the last three months. Such large upward revisions often come before continued positive price momentum, as they show growing analyst confidence in the company's future profitability.
- Improving Profit Margins: The company's profit margin in the last reported quarter was 9.17%, a clear gain from 5.77% in the prior quarter and 4.65% two quarters ago. Growing margins point to better operational efficiency and pricing power, which are signs of a scalable, high-quality growth business.
- Consistent Execution: FIGS has beaten both earnings and revenue estimates in each of the last four quarters. This history of exceeding expectations builds trust with the investment community and can lessen volatility around future earnings reports.
Technical Health and Setup Summary
The provided technical analysis report gives FIGS a high overall rating of 9 out of 10, reflecting its strong trend and market-leading performance over the past year. The long-term trend is rated as positive, while the short-term trend is neutral, hinting at a period of consolidation within the larger uptrend. The report notes several defined support levels below the current price, with the nearest important support zone between $13.38 and $13.42. The setup quality is rated as decent, indicating prices have been consolidating recently with lower volatility, which can come before a new move higher. For a detailed breakdown of the support, resistance, and trend analysis, you can review the full technical report for FIGS.
Finding Similar Opportunities
FIGS shows the type of security that can appear when combining strict technical trend filters with screens for fundamental growth increase. Investors looking to use a similar method to find other possible candidates can examine the predefined screen that found FIGS. This screen uses the Minervini Trend Template together with a High Growth Momentum rating to filter the market in a systematic way. You can find more results from this "High Growth Momentum + Trend Template" screen here.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on data provided and certain screening methodologies. All investing involves risk, including the potential loss of principal. You should conduct your own research and consider consulting with a qualified financial advisor before making any investment decisions. Please read our full disclaimer here.