Robinhood Markets Inc (NASDAQ:HOOD) Screens as a High-Growth Momentum Stock

Robinhood Markets Inc - A (NASDAQ:HOOD) has appeared as a notable option for investors using systematic growth strategies. The stock recently appeared through a screening method that joins Mark Minervini's strict Trend Template with a High Growth Momentum (HGM) rating, a two-part system made to find companies showing both solid technical momentum and outstanding fundamental growth traits. This system focuses on stocks in strong uptrends while also checking they have the earnings and revenue speed that usually supports continued price gains.

Meeting the Minervini Trend Template

The basis of this examination is the Minervini Trend Template, a group of technical rules that finds stocks in a confirmed stage 2 uptrend. For a stock to pass, it must show strength over several moving averages and price points. Robinhood Markets fits these rules clearly, indicating a solid technical foundation.

• Price Above Key Moving Averages: HOOD's current price of $145.00 trades well above its rising 50-day ($116.01), 150-day ($81.17), and 200-day ($72.84) simple moving averages. This arrangement confirms the stock is in a bull market phase across short, intermediate, and long-term timeframes.
• Moving Average Arrangement: The 50-day SMA is positioned above both the 150-day and 200-day SMAs, and the 150-day SMA is above the 200-day SMA. This ordered, upward-sloping pattern is a standard sign of a solid trending stock, showing increasing momentum.
• Position Relative to 52-Week High/Low: The stock is currently trading within 25% of its 52-week high of $153.86, a main Minervini rule that implies the stock has strong momentum and is a frontrunner in its group. Also, the current price is over 500% above its 52-week low of $23.00, showing a strong recovery and growth pattern.
• Superior Relative Strength: With a ChartMill Relative Strength (CRS) rating of 98.75, HOOD is doing better than nearly 99% of all stocks in the market. This outstanding relative strength is a fundamental part of the Minervini method, as it shows institutional buying and market leadership.

Qualifying as a High-Growth Candidate

Beyond a clean technical view, the screening process needs a high growth momentum rating, which HOOD meets through very strong fundamental improvements. The company has shown a major turnaround and speed in its main financial numbers.

• Very Strong Earnings Growth: The company's earnings per share (EPS) for the trailing twelve months (TTM) are at $1.97, showing a very large year-over-year growth of 497%. Recent quarterly performance is even more noticeable, with the last quarter showing 100% growth compared to the same quarter last year, and the quarter before that increasing over 3,000%.
• Notable Revenue Speed: Revenue growth has been similarly solid, with TTM revenue up 59% year-over-year. The most recent quarter had sales grow 45% compared to the prior year, while the previous quarter grew by 50%. This speed is an important point for high-growth investors, as it often comes before major price re-ratings.
• Solid Profitability and Analyst Trust: Robinhood has turned its revenue growth into profits, having a profit margin of 39% in the last quarter. This operational effectiveness has been seen; analysts have greatly increased their estimates, with the average EPS estimate for next year moved up by nearly 27% over the last three months.

Technical Health and Setup Examination

A look at the detailed technical report for HOOD gives the stock a complete technical rating of 10 out of 10. The report states that both the long and short-term trends are positive, and the stock is doing better than 100% of its peers in the Capital Markets industry. The examination also finds a number of clear support areas below the current price, which can help investors set their risk limits. However, the report also gives a warning for new entries, stating that while the technical health is very good, the recent price movement has been unstable. The setup rating is a low 3, implying that investors might prefer to wait for a time of consolidation or a move back toward support to start a new position with a better risk/reward balance.

Finding Similar Opportunities

For investors wanting to use this same strict screening method to find other possible high-growth, trending stocks, the process can be copied. The "High Growth Momentum + Trend Template" screen is made to systematically find companies that, like Robinhood, fit these strict technical and fundamental rules.

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Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. The author has no position in HOOD. All investment decisions involve risk, and you should conduct your own research and consult with a qualified financial advisor before making any investment decisions. Please read our full disclaimer and terms of service for more information.