For investors looking to join solid earnings momentum with positive chart patterns, a multi-factor screening method can be a useful instrument. By selecting for stocks that show strong fundamental growth, good technical trends, and a price structure that is coming together, the aim is to find chances where a company's bettering business path lines up with a possible move upward in its share price. This method joins the ideas of high-growth momentum investing with technical study to find securities that may be ready for their next rise.
ROKU INC (NASDAQ:ROKU) appears as a candidate from a screen like this, fitting needs for a High Growth Momentum Rating above 4, a Technical Rating above 7, and a Setup Rating above 7. This mix indicates the streaming platform company is both showing speeding up business basics and trading in a technically sound pattern that may offer a clear point to enter.
High Growth Momentum Basics
The center of the momentum plan depends on finding companies with speeding earnings and sales growth, positive surprises, and upward analyst changes. ROKU's shown numbers display big betterment across important areas:
- Large EPS Growth: The newest quarter-over-quarter earnings per share growth is at a notable 366.7%. This comes after solid earlier quarters of 129.2% and 45.7% growth, showing a strong speed increase in profit.
- Positive Estimate Changes: Analyst feeling has become clearly positive. The average EPS guess for the next fiscal year has been changed upward by 159.7% over the last three months, mirroring growing belief in the company's earnings ability.
- Steady Earnings Surprises: ROKU has topped EPS guesses in each of the last four quarters, with an average surprise of 75.1%. This steady beating of hopes is a sign of positive momentum.
- Good Free Cash Flow Creation: The company's free cash flow per share has increased by over 338% in the past year, pointing to bettering financial state and work efficiency.
While the company's trailing twelve-month EPS is still negative, the striking quarter-over-quarter betterments and high forward guesses point to a fast shift in bottom-line results. This basic speed increase is exactly what the High Growth Momentum Rating aims to find.
Technical Soundness and Market Place
Outside the basics, a stock must be in a verified upward path to line up with momentum plans. As stated in the full ChartMill Technical Analysis report, ROKU shows very good technical state.
The stock gets a full Technical Rating of 10 out of 10. This high score is backed by a few parts:
- Both its long-term and short-term paths are scored as positive.
- The stock is trading above all main moving averages (20, 50, 100, and 200-day), which are all going up, a usual mark of a solid upward path.
- It is doing better than 87% of all stocks over the past year and 87% of its group in the Entertainment field.
- Now trading near its 52-week high, ROKU is showing the relative strength that momentum investors focus on.
The Setup and Possible Trade Action
A high Technical Rating verifies the trend, but a good Setup Rating helps find a possible entry point. ROKU's Setup Rating of 7 shows the stock is coming together after its recent gain, which can sometimes come before a new upward move.
The technical report states that movement has gone down lately and prices have been coming together. A clear resistance area has been found just above the present price, near $110.69 to $111.09. The study points to a possible trade setup with an entry just above this resistance zone, using the nearby support zone around $107.69 to $110.67 to set a risk level. This form gives a plan for a careful entry, letting an investor join if the stock confirms its strength by moving upward, while having a clear exit point if the move fails.
End
ROKU shows a case where strong basic momentum meets a sound technical view. The company's striking quarter-over-quarter earnings speed increase, big positive analyst changes, and good free cash flow growth meet the needs for high-growth investors. At the same time, its full Technical Rating confirms a strong upward path is present, and its fair Setup Rating points out a coming together that may give a clear risk/reward chance for a new entry.
For investors using this multi-factor method, ROKU acts as an example of how screening for growth, trend, and setup can find possible candidates worth more study.
Find more possible high-growth momentum upward move setups by looking at our set screen here.
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Notice: This article is for information only and does not make up investment advice, a suggestion, or a deal to buy or sell any security. The study is based on given data and should not be the only base for an investment choice. All investing has risk, including the chance of losing the main amount. Always do your own study and think about talking with a skilled financial advisor before making any investment choices.
