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Relative strength focuses on stocks that have performed well compared to the market or another relevant benchmark.
By targeting those displaying this favorable price action, investors can find themselves in positive market trends where buyers are in control.
For those interested in momentum, three stocks – Super Micro Computer (SMCI - Free Report) , e.l.f. Beauty (ELF - Free Report) , and CrowdStrike (CRWD - Free Report) – could all be considered. All three have outperformed nicely over the last month.
Let’s take a closer look at each.
Super Micro Computer
Enjoying tailwinds stemming from the AI-frenzy, Super Micro Computer, a Zacks Rank #1 (Strong Buy), is the premier provider of advanced Server Building Block Solutions for 5G/Edge, Data Center, Cloud, Enterprise, Big Data, HPC, and Embedded markets worldwide.
SMCI’s current year outlook has improved in a big way, with the $16.78 Zacks Consensus EPS estimate moving nearly 110% higher over the last year.
Image Source: Zacks Investment Research
Concerning its latest quarterly release, SMCI posted a 2% beat relative to the Zacks Consensus EPS estimate and exceeded sales expectations by 14%, representing growth rates of 70% and 103%, respectively.
The better-than-expected results caused buyers to swarm, with SMCI shares now up a staggering 90% over the last month.
Image Source: Zacks Investment Research
The stock remains a prime selection for growth investors seeking AI exposure, further reinforced by its Style Score of ‘A’ for Growth.
e.l.f. Beauty
e.l.f. Beauty is a cosmetics company, with its products primarily consisting of face makeup, eye makeup, lip products, nail products, and cosmetic kits. The stock is a Zacks Rank #2 (Buy), with earnings expectations moving higher across nearly all timeframes.
Image Source: Zacks Investment Research
The company has consistently surprised in a big way as of late, exceeding the Zacks Consensus EPS estimate by an average of 90% across its last four releases. The company posted a 51% bottom line beat and posted sales 9% ahead of expectations in its latest release.
ELF’s top line has seen a notable acceleration, as shown below.
Image Source: Zacks Investment Research
Keep an eye out for the company’s next quarterly release scheduled for February 6th after the market close, as consensus headline expectations presently suggest 18% higher earnings on 60% improved sales.
CrowdStrike
CrowdStrike, a current Zacks Rank #1 (Strong Buy), is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. Earnings expectations have moved modestly higher across nearly all timeframes.
The company’s growth expectations are impossible to ignore, with consensus estimates for its current fiscal year suggesting 91% earnings growth on 36% higher sales. Peeking ahead to FY25, expectations allude to an additional 24% boost in earnings paired with a 30% sales bump.
The stock sports a Style Score of ‘A’ for Growth.
Image Source: Zacks Investment Research
Shares trade at steep multiples, reflective of its high-growth nature. The current forward 12-month price-to-sales ratio presently sits at 18.5X, well off five-year highs of 57.9X but undoubtedly on the higher end of the spectrum.
Image Source: Zacks Investment Research
Bottom Line
Relative strength investing is centered around targeting stocks displaying outperformance. And when you add in the Zacks Rank, the strategy can become even more powerful.
And that’s precisely what all three stocks above – Super Micro Computer (SMCI - Free Report) , e.l.f. Beauty (ELF - Free Report) , and CrowdStrike (CRWD - Free Report) – have displayed, delivering outperformance on the back of improved earnings outlooks.
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These 3 Buy-Rated Stocks Are Red-Hot
Relative strength focuses on stocks that have performed well compared to the market or another relevant benchmark.
By targeting those displaying this favorable price action, investors can find themselves in positive market trends where buyers are in control.
For those interested in momentum, three stocks – Super Micro Computer (SMCI - Free Report) , e.l.f. Beauty (ELF - Free Report) , and CrowdStrike (CRWD - Free Report) – could all be considered. All three have outperformed nicely over the last month.
Let’s take a closer look at each.
Super Micro Computer
Enjoying tailwinds stemming from the AI-frenzy, Super Micro Computer, a Zacks Rank #1 (Strong Buy), is the premier provider of advanced Server Building Block Solutions for 5G/Edge, Data Center, Cloud, Enterprise, Big Data, HPC, and Embedded markets worldwide.
SMCI’s current year outlook has improved in a big way, with the $16.78 Zacks Consensus EPS estimate moving nearly 110% higher over the last year.
Image Source: Zacks Investment Research
Concerning its latest quarterly release, SMCI posted a 2% beat relative to the Zacks Consensus EPS estimate and exceeded sales expectations by 14%, representing growth rates of 70% and 103%, respectively.
The better-than-expected results caused buyers to swarm, with SMCI shares now up a staggering 90% over the last month.
Image Source: Zacks Investment Research
The stock remains a prime selection for growth investors seeking AI exposure, further reinforced by its Style Score of ‘A’ for Growth.
e.l.f. Beauty
e.l.f. Beauty is a cosmetics company, with its products primarily consisting of face makeup, eye makeup, lip products, nail products, and cosmetic kits. The stock is a Zacks Rank #2 (Buy), with earnings expectations moving higher across nearly all timeframes.
Image Source: Zacks Investment Research
The company has consistently surprised in a big way as of late, exceeding the Zacks Consensus EPS estimate by an average of 90% across its last four releases. The company posted a 51% bottom line beat and posted sales 9% ahead of expectations in its latest release.
ELF’s top line has seen a notable acceleration, as shown below.
Image Source: Zacks Investment Research
Keep an eye out for the company’s next quarterly release scheduled for February 6th after the market close, as consensus headline expectations presently suggest 18% higher earnings on 60% improved sales.
CrowdStrike
CrowdStrike, a current Zacks Rank #1 (Strong Buy), is a leader in next-generation endpoint protection, threat intelligence, and cyberattack response services. Earnings expectations have moved modestly higher across nearly all timeframes.
The company’s growth expectations are impossible to ignore, with consensus estimates for its current fiscal year suggesting 91% earnings growth on 36% higher sales. Peeking ahead to FY25, expectations allude to an additional 24% boost in earnings paired with a 30% sales bump.
The stock sports a Style Score of ‘A’ for Growth.
Image Source: Zacks Investment Research
Shares trade at steep multiples, reflective of its high-growth nature. The current forward 12-month price-to-sales ratio presently sits at 18.5X, well off five-year highs of 57.9X but undoubtedly on the higher end of the spectrum.
Image Source: Zacks Investment Research
Bottom Line
Relative strength investing is centered around targeting stocks displaying outperformance. And when you add in the Zacks Rank, the strategy can become even more powerful.
And that’s precisely what all three stocks above – Super Micro Computer (SMCI - Free Report) , e.l.f. Beauty (ELF - Free Report) , and CrowdStrike (CRWD - Free Report) – have displayed, delivering outperformance on the back of improved earnings outlooks.