SCHWAB (CHARLES) CORP (NYSE:SCHW) Shows Strong Growth Momentum and Technical Strength for Investors

Investors looking for stocks with strong growth potential often focus on companies that show both solid earnings growth and positive technical patterns. The approach involves finding firms with notable quarterly earnings growth, rising analyst estimates, and improving profit margins, all while displaying healthy price movements. SCHWAB (CHARLES) CORP (NYSE:SCHW) recently appeared in such a search, earning a High Growth Momentum (HGM) Rating of 6, a Technical Rating of 10, and a Setup Rating of 7. This mix indicates the stock could attract growth-focused traders who value both strong financial performance and a technically favorable entry point.

Fundamental Growth Momentum

SCHW’s growth figures match what momentum investors typically seek:

• Earnings Growth: The company reported a 56.2% year-over-year increase in EPS last quarter, after a 40.5% rise in the prior quarter. This faster profit growth is a major reason for its HGM Rating.
• Analyst Confidence: Over the last three months, analysts have lifted next-year EPS estimates by 4.3%, showing belief in continued growth.
• Margin Improvement: SCHW’s profit margin reached 27% last quarter, up from 25.8% the previous quarter and 19.1% a year ago, indicating better operational performance.
• Free Cash Flow Growth: FCF per share rose 23.2% over the past year, highlighting the company’s ability to generate cash alongside earnings.

These elements are vital for momentum strategies, as earnings beats and higher estimates often lead to further price gains.

Technical Strength and Setup Quality

SCHW’s near-perfect Technical Rating of 10 reflects its strong trend and market performance:

• Trend Direction: Both short- and long-term trends are positive, with the stock near 52-week highs and beating 88% of the market over the past year.
• Support Levels: Clear support zones exist between $95.39 and $96.09, providing a defined area for risk management.
• Consolidation Pattern: The Setup Rating of 7 points to a recent pullback within a larger uptrend, possibly offering a lower-risk entry. According to the technical report, a move above $98.58 could signal a continuation of the upward trend, with a stop-loss level around $95.38.

Why This Combination Matters

High Growth Momentum strategies work best when strong financials align with positive price action. SCHW’s rising earnings, higher estimates, and bullish technicals make a strong case. The stock’s technical setup—tightening near highs with clear support—simplifies entry and exit decisions, a key feature of disciplined momentum trading.

For investors interested in similar opportunities, more high-growth momentum stocks with solid technical patterns can be found in this pre-configured screen.

Disclaimer: This analysis is not investment advice. Always conduct your own research and consider risk management strategies before trading.