Keros Therapeutics Inc (NASDAQ:KROS) Emerges as a High-Growth Momentum Breakout Candidate

For investors looking to join fundamental growth momentum with timely technical entries, a multi-layered screening method can be very effective. This process involves finding companies showing firm earnings and sales acceleration, a sign of high-growth momentum, while also displaying firm price trends and constructive chart patterns that point to a possible breakout. By sorting for stocks with high scores in ChartMill's proprietary High Growth Momentum (HGM), Technical (TA), and Setup Quality ratings, investors can find names where strong fundamental stories are meeting favorable technical conditions. Keros Therapeutics Inc (NASDAQ:KROS) recently appeared from such a screen, offering a case study in this joined strategy.

High Growth Momentum Fundamentals

The center of the momentum strategy is in finding exceptional and accelerating growth. Keros Therapeutics receives a firm HGM Rating of 6, reflecting firmness across several key fundamental criteria important for momentum investors. The company's financials tell a story of explosive, though from a small base, top-line expansion and notable bottom-line improvement.

• Exceptional Revenue Growth: The company's trailing twelve-month (TTM) revenue growth is at an extraordinary 37,798%, mainly driven by milestone payments and collaboration revenue. While such percentages are not maintainable long-term, they point to a pivotal commercial and developmental phase.
• Strong and Accelerating Earnings: KROS shows notable earnings per share (EPS) growth of nearly 130% over the past TTM period. More important for momentum, recent quarterly EPS growth shows notable acceleration, moving from 14.9% three quarters ago to 399.2% two quarters ago.
• Positive Surprises and Revisions: The company has exceeded EPS estimates in three of the last four quarters, with an average surprise of over 416%. Also, analyst sentiment is positive, with the average EPS estimate for the next year adjusted upward by over 4,596% in the last three months, a firm sign of increasing confidence in the company's near-term outlook.

These factors, high growth rates, acceleration, positive surprises, and upward revisions, are exactly what the HGM rating is built to find, making KROS a notable candidate for investors using a high-growth momentum method.

Technical Strength and Trend Quality

A strong fundamental story must be supported by price action. According to ChartMill's detailed technical report, Keros Therapeutics holds a perfect Technical Rating of 10 out of 10. This high score signals outstanding technical condition across multiple timeframes.

• Clear Uptrend: Both the long-term and short-term trends for KROS are rated as positive. The stock is trading above all its key moving averages (20, 50, 100, and 200-day SMAs), and each of these averages is itself in a rising pattern.
• Market Leadership: With a yearly performance that beats 89% of all stocks, KROS shows significant relative strength. It is currently trading near its 52-week high, matching the broader market's firmness but displaying better individual performance.
• Firm Support Structure: The technical analysis finds multiple layers of support below the current price, ranging from near-term levels around $21.13-$21.23 down to more important zones near $20.13 and $18.38. This layered support offers a structure for handling risk.

The Setup: Consolidation Before a Possible Breakout

While a perfect TA Rating confirms the stock is in a healthy uptrend, the Setup Quality Rating of 7 addresses the important question of when to think about an entry. This score shows the stock is forming a workable consolidation pattern.

• Reduced Volatility & Defined Range: The report states that prices have been consolidating lately with reduced volatility, trading in a range between about $16.75 and $22.55 over the past month. This pause in the uptrend lets the moving averages catch up and can build energy for the next move higher.
• Defined Resistance and Entry Zone: A clear resistance zone is found between $21.69 and $21.84. The suggested trading setup involves a possible breakout entry above this zone at $21.85, with a stop loss placed below support at $21.12. This describes a clear, rules-based method where the trade is only started upon confirmation of strength, the breakout.

Finding Similar Opportunities

The meeting of a strong growth story, faultless technical trends, and a defined entry setup makes KROS a notable example for momentum-focused investors. This combination is exactly what the screening method aims to find.

For investors interested in finding other stocks that meet this specific mix of high-growth fundamentals and actionable technical setups, more results can be found by running the High Growth Momentum Breakout Setups screen.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis presented is based on data provided and should not be the sole basis for any investment decision. Investing involves risk, including the potential loss of principal. Always conduct your own due diligence and consider consulting with a qualified financial advisor before making any investment decisions.