Why the high growth investor may take a look at SPOTIFY TECHNOLOGY SA (NYSE:SPOT).

Our stock screener has identified SPOTIFY TECHNOLOGY SA (NYSE:SPOT) as a potential breakout candidate. This technical breakout setup pattern occurs when the stock consolidates after a strong uptrend. While the actual breakout is uncertain, it may be worth keeping an eye on NYSE:SPOT.

Technical Analysis Observations

ChartMill employs a sophisticated system to assign a Technical Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple technical indicators and properties.

We assign a technical rating of 8 out of 10 to SPOT. 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.

• The long term trend is positive and the short term trend is neutral. The long term trend gets the benefit of the doubt for now.
• Looking at the yearly performance, SPOT did better than 97% of all other stocks. We also observe that the gains produced by SPOT over the past year are nicely spread over this period.
• SPOT is part of the Entertainment industry. There are 72 other stocks in this industry. SPOT outperforms 97% of them.
• SPOT is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so SPOT slightly outperforms the market at the moment.
• In the last month SPOT has a been trading in the 475.01 - 621.20 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

Check the latest full technical report of SPOT for a complete technical analysis.

How does the Setup look for SPOT

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. SPOT scores a 7 out of 10:

SPOT has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 549.18. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 510.82, a Stop Loss order could be placed below this zone.

What matters for high growth investors.

ChartMill assigns a High Growth Momentum Rating (HGM) to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth and profitability elements, including EPS and revenue growth, accelleration, surprises and revisions. In the case of SPOT, the assigned 6 reflects its growth potential:

Earnings Momentum

• In the most recent financial report, SPOT reported a 376.0% increase in quarterly earnings compared to the previous quarter. This notable growth indicates positive momentum in the company's financials, suggesting an upward trend
• Accelerating EPS growth for SPOT: the current Q2Q growth of 376.0% exceeds the previous quarter Q2Q growth of 339.0%.
• EPS growth accelerated for 3 quarters in a row.
• The 1-year EPS growth of SPOT (374.0%) highlights the company's ability to consistently improve its earnings performance and suggests a positive outlook for future profitability.
• SPOT has demonstrated strong quarter-to-quarter (Q2Q) revenue growth of 15.55%, reflecting its ability to generate consistent increases in sales. This growth highlights the company's effective market positioning and its potential for continued success.
• The average next Quarter EPS Estimate for SPOT has experienced a 14.47% change in the last 3 months, reflecting evolving expectations by analysts regarding the company's EPS performance.

Financial Strength & Profitability

• With a favorable trend in its operating margin over the past year, SPOT demonstrates its ability to enhance profitability through efficient operations. This growth reflects the company's focus on optimizing its cost structure.
• With a favorable trend in its free cash flow (FCF) over the past year, SPOT demonstrates its ability to generate robust cash flows and maintain financial stability. This growth reflects the company's focus on efficient capital allocation and cash management.
• SPOT has achieved an impressive Return on Equity (ROE) of 20.6%, showcasing its ability to generate favorable returns for shareholders.
• With a Debt/Equity ratio of 0.36, SPOT maintains a solid financial position with controlled leverage.

Market Strength & Institutional Confidence

• SPOT exhibits a favorable ownership structure, with an institutional shareholder ownership of 67.74%. This signifies a diverse investor base, which can contribute to a more stable and efficient market for the stock.
• The Relative Strength (RS) of SPOT has consistently been strong, with a current 97.07 rating. This indicates the stock's ability to exhibit relative price outperformance and reflects its competitive strength.

More ideas for high growth momentum breakouts can be found on ChartMill in our High Growth Momentum Breakout screen.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.