Why the high growth investor may take a look at SPROUTS FARMERS MARKET INC (NASDAQ:SFM).

Our stock screener has spotted SPROUTS FARMERS MARKET INC (NASDAQ:SFM) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NASDAQ:SFM.

Insights from Technical Analysis

ChartMill assigns a Technical Rating to every stock. This score, ranging from 0 to 10, is updated daily and is determined by evaluating multiple technical indicators and properties.

Taking everything into account, SFM scores 8 out of 10 in our technical rating. This is due to a consistent overall performance, although we see some doubts in the very recent evolution. In the medium time frame things are still looking good.

• Looking at the yearly performance, SFM did better than 96% of all other stocks. On top of that, SFM also shows a nice and consistent pattern of rising prices.
• SFM is part of the Consumer Staples Distribution & Retail industry. There are 41 other stocks in this industry. SFM outperforms 92% of them.
• SFM is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so SFM is performing more or less in line with the market.
• The long term trend is positive and the short term trend is negative. It is probably better to wait until this picture becomes clearer.

Our latest full technical report of SFM contains the most current technical analsysis.

How do we evaluate the setup for SFM?

ChartMill takes into account not only the Technical Rating but also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, SFM exhibits a 8 setup rating, indicating its consolidation status in recent days and weeks.

SFM has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is very little resistance above the current price. There is a support zone below the current price at 156.98, a Stop Loss order could be placed below this zone.

Understanding SFM's High Growth Momentum Score

Every stock receives a High Growth Momentum Rating (HGM) from ChartMill, ranging from 0 to 10. This rating assesses various growth and profitability aspects, including historical and projected EPS and revenue growth. SFM boasts a 7 out of 10:

Earnings Momentum

• With a favorable trend in its quarter-to-quarter (Q2Q) earnings per share (EPS), SFM highlights its ability to generate increasing profitability, showcasing a 61.61% growth.
• SFM shows accelerating EPS growth: when comparing the current Q2Q growth of 61.61% to the previous quarter Q2Q growth of 61.22%, we see the growth rate improving.
• Sales growth accelerated for 3 quarters in a row.
• The 1-year EPS growth of SFM (49.83%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• The recent q2q revenue growth of 18.72% of SFM showcases the company's ability to generate increasing revenue in a short period, reflecting its positive growth trajectory.
• SFM shows accelerating Sales growth: when comparing the current Q2Q growth of 18.72% to the previous quarter Q2Q growth of 17.53%, we see the growth rate improving.
• Sales acceleration happened 3 quarters in a row.
• The average next Quarter EPS Estimate for SFM has experienced a 13.2% change in the last 3 months, reflecting evolving expectations by analysts regarding the company's EPS performance.
• SFM has consistently exceeded EPS estimates in the last 4 quarters, demonstrating its ability to outperform market expectations. This trend highlights the company's strong financial performance and its potential for future growth.

Profitability & Financial Strength

• SFM has experienced notable growth in its operating margin over the past year, reflecting improved operational performance. This growth suggests the company's ability to generate higher profits from its core business activities.
• In the past year SFM has expanded its Profit Margin, which demonstrates increasing profitability.
• SFM has shown positive growth in its free cash flow (FCF) over the past year, indicating improved cash generation and financial strength. This growth highlights the company's ability to effectively manage its cash flows and generate surplus funds.
• SFM demonstrates a strong Return on Equity(ROE) of 34.67%. This indicates the company's ability to generate favorable returns for shareholders and reflects its efficient utilization of capital. SPROUTS FARMERS MARKET INC shows promising potential for continued success.
• With a Debt/Equity ratio of 0.01, SFM demonstrates prudent financial management.

Market Strength

• The Relative Strength (RS) of SFM has consistently been strong, with a current 96.17 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

More high growth momentum breakout stocks can be found in our High Growth Momentum Breakout screen.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.