For investors looking for a mix of sound business traits and good market timing, a plan that joins solid growth features with encouraging chart patterns can be an interesting method. This process selects companies showing better earnings and revenue growth, good financial standing, and high profitability, signs of a lasting growth narrative. It then adds this basic filter with chart study to find stocks that are resting or forming breakout shapes, which may point to a good time to buy as momentum increases. The aim is to locate good growth stocks at a time when their price movement hints a phase of sideways action could be ending and a new rising move may start.
Veeva Systems Inc-Class A (NYSE:VEEV) comes forward as a pick from this kind of screening. The company, a top supplier of cloud software for the life sciences field, seems to fit the main ideas of this dual plan.
Basic Strength: The Foundation for Growth
The basic argument for Veeva is built on its very good operational results and careful finances. Based on its basic analysis report, Veeva receives high scores in the main areas a growth-focused plan looks for.
- Very Good Profitability: Veeva's profitability score is a high 9 out of 10. The company has notable margins that place it with the top in its sector:
- A Profit Margin of 27.93% and an Operating Margin of 28.88%, each better than 97% of similar Health Care Technology firms.
- Good returns on capital, with a Return on Invested Capital (ROIC) of 10.39% and a Return on Equity of 12.22%.
- Good Financial Standing: With a Health score of 9/10, Veeva shows a very strong balance sheet. The company has no debt, and its liquidity measures are very good, with a Current Ratio and Quick Ratio both at 7.53. This financial soundness gives important safety and room to operate, a key quality for keeping long-term growth.
- Continued Growth Path: Veeva's Growth score of 7/10 shows its steady increase. Over the last year, Earnings Per Share (EPS) rose by 23.84% and Revenue went up by 15.96%. For the future, experts predict more good growth, with average yearly EPS and Revenue growth estimated at 15.33% and 14.37%, in that order. This reliable performance in its big target market, the worldwide life sciences field, shows the company's skill in keeping its leading position.
Chart Picture: A Shape of Resting
While Veeva's long-term chart trend is now down, the short-term price movement shows the exact shape this screening looks for. The chart analysis report notes a Setup Rating of 7, pointing to a "fair setup shape" even with the generally low chart rating.
The main point is that the stock price has been moving sideways in a fairly broad area over the last month, with less price movement. This time of resting after a fall can sometimes come before a new price move. The report finds a clear support area just under the present price, from about $219.48 to $221.13, made by several trend lines. A clear support level near the present trading area is an important chart part, giving a sensible place to think about for managing risk.
Price and Points to Think About
Veeva's price score shows a mixed view, with a neutral 5 out of 10. With a P/E ratio near 28.7, the stock is not low-priced, trading close to the wider S&P 500 average. Still, this higher price can be seen next to its very good profitability and the expected mid-teens earnings growth. The PEG ratio, which includes that growth, hints the price may be more fair. For growth investors, paying more for a company with Veeva's high-quality basics and market spot is often accepted, though it does add risk if future growth rates are lower than expected.
Summary
Veeva Systems shows the kind of company a combined growth-and-setup plan tries to find. Its basic picture is good in all ways, profitable, financially sound, and growing steadily, which meets the main need of putting money in a good business with a lasting edge. On the chart, the stock is showing it may be stopping and resting after a down move, with a set support level present. This picture hints the selling may be slowing, possibly creating conditions for a turn up if the basic story continues.
Investors using this method would see Veeva as a good growth pick where the chart view is starting to match, maybe giving a more planned time to buy than during a time of strong upward price moves.
You can look at other stocks that fit this "Strong Growth Stocks with good Technical Setup Ratings" idea by using the ready-made stock screener.
Disclaimer: This article is for information only and is not financial advice, a suggestion, or an offer to buy or sell any security. Investing has risk, including the chance of losing the original money. You should do your own study and talk with a qualified financial advisor before making any investment choices.
