SABESP (NYSE: SBS) Shows Strong Technical and Fundamental Growth Momentum
By Mill Chart
Last update: Oct 22, 2025
Companhia de Saneamento Basico do Estado de Sao Paulo SABESP (NYSE:SBS) is a notable example for investors using systematic growth methods. This Brazilian water utility company has recently shown features that fit with approaches aimed at finding companies with solid technical momentum and improving fundamental performance. The selection method joins Mark Minervini's Trend Template for technical approval with other checks for strong growth momentum, forming a full screening process that assesses both price movement and business basics.
Technical Strength and Trend Template Alignment
SABESP displays a notable technical profile that meets the main needs of the Minervini Trend Template, which focuses on stocks in clear uptrends with good relative strength. The template's rules make sure found securities are in definite stage 2 advances, the main accumulation phase where institutions usually build positions.
The stock's present technical situation shows several good points:
- Trading at $23.99, much higher than all main moving averages (50-day: $23.14, 150-day: $20.93, 200-day: $19.75)
- All major moving averages moving upward, confirming continued positive momentum
- Relative strength ranking of 89.59, showing it does better than almost 90% of all stocks
- Located within 4.3% of its 52-week high of $25.07 while trading 73% above its 52-week low
This technical setup is important because Minervini's research indicates stocks close to new highs with good relative strength often keep doing well, as they show market leadership rather than high valuations. The agreement across several timeframes, with shorter-term averages above longer-term ones, creates a layered positive situation that has often come before continued strength.
Fundamental Growth Acceleration
Besides technicals, SABESP shows notable fundamental improvement across main measures. The company's recent earnings performance reveals large growth momentum, a key part for high-growth investors looking for companies with better business dynamics.
Recent quarterly performance main points include:
- EPS growth of 76.27% in the last quarter compared to the same time last year
- Three straight quarters of large earnings beats, averaging 119.57% above estimates
- Yearly EPS growth of 174.44% on a trailing twelve-month basis
- Revenue increase of 32.82% in the latest quarter with regular beats against expectations
This earnings momentum is especially notable within the utilities sector, which normally shows more steady but slower growth features. The large upward changes to forward estimates, with next-year EPS forecasts rising almost 15% over the past three months, suggest analysts are seeing better business conditions and changing their models as a result.
Profitability and Business Quality
The company's improving profitability measures further back the growth story. SABESP has shown meaningful margin growth, with quarterly profit margins getting better from 17.59% to 23.83% in the most recent reporting period. This margin improvement, joined with good revenue growth, creates a strong mix that often draws institutional interest.
The fundamental improvement fits with Minervini's focus on companies having "earnings explosions," where fast gains in profitability happen at the same time as technical breakouts. This meeting of technical and fundamental strength creates what Minervini calls the "SEPA" (Specific Entry Point Analysis) features that often come before large price gains.
Market Context and Relative Strength
Within its sector, SABESP shows clear leadership, doing better than 92% of other water utility stocks. This sector-relative strength is important because Minervini's research shows that the top performers usually lead their industry groups during early bull market stages. The stock's ability to do better than both the wider market and its direct competitors suggests institutional accumulation and recognition of its improving fundamentals.
The present market situation, with the S&P500 showing positive long-term and short-term trends, gives a good background for continuation of this momentum. Historical review shows that stocks showing both technical and fundamental strength during generally positive market conditions tend to give better risk-adjusted returns.
Technical Analysis Summary
According to ChartMill's technical report, SABESP gets a perfect 10 out of 10 on technical rating, reflecting very good technical health across several timeframes. The analysis notes both short-term and long-term trends are positive, with the stock trading near 52-week highs while showing steady patterns of rising prices. The report finds five important support levels between $15.09 and $23.28, giving clear risk management levels for possible entries. While the setup rating is now at 4 due to recent volatility, the basic technical strength suggests waiting for consolidation could give better entry chances.
View the complete technical analysis report for detailed support and resistance levels
Investment Considerations
For investors following systematic growth methods, SABESP presents a notable chance that meets both technical momentum standards and fundamental improvement needs. The mix of good trend features, sector leadership, and remarkable earnings growth creates a profile that fits with approaches looking for companies in the early parts of large price gains.
The stock's present technical setup suggests it may be forming a base near highs, which could turn into another move higher if fundamental momentum continues. Investors might want to watch for possible volatility decrease patterns or other consolidation shapes that could give lower-risk entry points fitting with the Minervini method.
Disclaimer: This analysis is for informational and educational purposes only and does not constitute investment advice. All investments involve risk, and past performance is no guarantee of future results. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
