Welcome to the IBD Screen Of The Day: a look at the IBD Stock Screener, with an eye toward growth stocks with bullish characteristics. Today, the Rising Profit Estimates screen is in focus, a list of companies in which analysts are raising earnings estimates.
IBD Stock Screener was launched in 2019 and is found in the Research section of Investors.com. It includes popular lists such as the IBD 50, Fastest Growing EPS and Top Stock Under $10. Access requires an IBD Digital subscription.
Of the 11 stocks on the profit estimates screen Thursday, Palo Alto Networks (PANW) had already shown price performance after charging into a new buy zone. It had tripled in price from its 12-month lows before the breakout.
Five Below (FIVE), Five9 (FIVN), BlackLine (BL), 360 DigiTech (QFIN) and Hillenbrand (HI) are in bullish chart patterns.
Palo Alto Networks Stock
Palo Alto Networks has broken out of a flat base, according to MarketSmith analysis. The buy point was 375.10, and shares remain near that level. Its relative strength line is spiking, and has just hit a fresh high. This is a bullish indicator.
Palo Alto Networks has a near-perfect Composite Rating of 98, with excellent earnings and stock market performance.
The Stock Checkup shows earnings rose by an average 14% over the past three quarters. CAN SLIM connoisseurs look for 25% growth in this metric. But EPS growth accelerated in the last three quarters, and reached 54% in the most recent quarter. Analysts see full-year EPS growth of 18% in 2021 and 20% in 2022.
Another key consideration for CAN SLIM investors is whether a stock has strong institutional support. The cybersecurity stock boasts an Accumulation/Distribution Rating of B+, which represents moderate-to-heavy buying over the past 13 weeks. In total, 45% of its stock is held by funds.
Five Below Stock
Five Below stock is finding support at its 10-week line. This offers a buying opportunity, the first since a breakout from an ascending base at 168.07. The stock has a less than ideal Composite Rating of 88.
The earnings picture is mixed amid the Covid-19 crisis. Analysts expect it to report that full-year EPS declined 29% in the fiscal year ended last month, and that it will rebound with 91% growth the next fiscal year. The latter point is important, because the projected full-year EPS of $4.04 is well clear of the previous best of $2.98 in the fiscal year ended in January 2020.
Five Below serves a niche in the value-oriented teen and tween demographic. Analysts say it has a track record of quickly spotting and capitalizing on trends, such as fidget spinners.
2020 was a tough year for retailers like Five Below. The pandemic shut down stores for months earlier in the year. Despite this, the retailer bested earnings views when it posted results in December, and same-store sales growth more than doubled expectations.
Five9 is another stock finding support. In addition, it is close to forming a new base. The buy point here appears to be 188.09.
Earnings performance is excellent, which is reflected in its EPS Rating of 92. Earnings growth is most impressive from a long-term perspective. The Stock Checkup shows EPS has grown by an average 154% over the past three years.
Analysts see full-year EPS growth of 7% for 2020. EPS is expected to decline 5% in 2021. However, analysts have been upwardly revising their estimates, which explains why Five9 makes the Rising Profit Estimates screen.
Many companies are shifting away from internal contact centers that provide customer support. San Ramon, Calif.-based Five9’s cloud software automates contact-center services. Last year the company introduced its newest website virtual assistant, which uses artificial intelligence tools to interact with consumers.
BlackLine stock is forming a flat base. The buy point is 141.92. Earnings are due after the close Feb. 11, which could act as a catalyst for further gains.
Its EPS Rating comes in at a perfect 99. Analysts see full-year 202o EPS growth popping 68%, before declining by 16% in 2021.
California-based BlackLine provides cloud-based software to automate and streamline accounting and finance operations.
360 DigiTech Stock
The IPO stock has just staged a powerful breakout from a cup base at 18.16. Shares made a powerful five-week climb to break out, so the stock may need to pause.
Unusually for an IPO stock, earnings are its strongest suit. It currently holds an EPS Rating of 97. Earnings accelerated the past two quarters, with EPS up 73% in the most recent quarter. Over the past three years EPS soared by an average 351%.
Even so, analysts are increasingly bullish on its EPS growth, with a consensus estimate of 33% growth for 2020, and earnings moderating to 17% growth in 2022.
The firm, formerly known as 360 Finance, operates digital consumer finance platforms, including finance products aimed at underserved borrowers.
Hillenbrand is finding support at its 10-week line.
The industrial conglomerate, whose businesses include burial caskets, is expected to have flat EPS in the fiscal year ending in this coming September, before improving to 9% growth in fiscal 2022.
The company has been making positive moves as it chases growth. Last year, CEO Joe Raver touted the benefits of its acquisition of Milacron, a leader in highly engineered and customized systems in plastic technology and processing. The $1.9 billion stock and cash acquisition was completed in November, 2019.