SOFI TECHNOLOGIES INC (NASDAQ:SOFI) Emerges as a High-Growth Momentum Stock with Strong Technical Setup

Investors looking for high-growth momentum stocks with solid technical setups often focus on companies showing fast earnings growth, strong sales increases, and positive price trends. The ChartMill High Growth Momentum (HGM) Rating merges these growth indicators with technical analysis to find stocks that not only have strong earnings momentum but also show clear breakout patterns. SOFI TECHNOLOGIES INC (NASDAQ:SOFI) stands out as a potential fit for this strategy, earning a 6 on the HGM Rating while also displaying a strong technical setup with a Technical Rating of 10 and a Setup Rating of 7.

Why SOFI Matches the High Growth Momentum Criteria

The HGM Rating assesses various growth and momentum factors, and SOFI performs well in several important areas:

• Fast Earnings Growth:

  • SOFI’s trailing twelve-month (TTM) EPS growth is an impressive 1,100%, showing a quick shift to profitability.
  • Recent quarterly EPS growth is even more notable, with the latest quarter reporting 700% year-over-year growth, followed by earlier quarters at 200%, 150%, and 266.7%.
  • The company has consistently exceeded EPS estimates over the past four quarters, with an average surprise of 54.6%, highlighting strong earnings momentum.

• Revenue Growth and Margin Improvement:

  • Revenue growth remains steady at 27.6% (TTM), with the most recent quarter speeding up to 43.8% year-over-year.
  • Profit margins have improved significantly, with the latest quarter showing a 9.2% net margin, up from 1.3% three quarters earlier.

• Analyst Optimism:

  • Analysts have increased next-year EPS estimates by 9.5% over the past three months, reflecting growing confidence in SOFI’s earnings path.

These metrics align with the HGM Rating’s focus on fast earnings growth, upward estimate changes, and improving margins, key factors for high-growth momentum investors.

Technical Strength and Setup Quality

Beyond fundamentals, SOFI’s technical profile adds to its appeal:

• Strong Trend and Performance:

  • The stock has a perfect Technical Rating of 10, backed by a long-term and short-term upward trend.
  • It beats 98% of all stocks over the past year and ranks near the top of its industry (Consumer Finance).

• Consolidation Before Possible Breakout:

  • The Setup Rating of 7 indicates a consolidation phase, with recent trading between $19.82 and $25.11.
  • Support is clear near $21.20, offering a logical stop-loss level for traders.
  • Large investors have shown growing interest, as seen in volume analysis, adding weight to the setup.

A full look at SOFI’s technicals is available in the full technical report.

Why This Combination Is Important

High-growth momentum strategies, like those based on CANSLIM or Minervini methods, stress both earnings momentum and technical strength. Stocks like SOFI, which display:

• Quick earnings growth,
• Positive analyst estimate changes, and
• A high-potential technical setup,
  are often top choices for significant moves. A consolidation near highs, combined with strong fundamentals, raises the chance of a lasting breakout.

Find More High-Growth Momentum Setups

For investors searching for similar opportunities, the High Growth Momentum Breakout Setups Screen filters for stocks with strong growth, high technical ratings, and actionable patterns.

Disclaimer: This analysis is for informational purposes only and should not be seen as investment advice. Always do your own research or consult a financial advisor before making investment decisions.