Growth screening often fails when investors focus only on earnings and revenue, ignoring whether the chart is ready to cooperate. The Strong Growth screen with good technical setup ratings is designed to close that gap: it starts with companies that are growing strongly, while still showing decent profitability and health, and then filters for technical breakout patterns that can improve the timing of an entry. DYCOM INDUSTRIES INC (NYSE:DY) is one company that comes through that screen with an interesting mix of fundamental momentum and a consolidating price structure.
Fundamental support for a growth thesis
Dycom's ChartMill fundamental report gives the company a rating of 6 out of 10, but the underlying breakdown is more encouraging for growth-focused investors. The growth component scores 8 out of 10, and profitability comes in at 7 out of 10. The report describes Dycom as showing excellent growth while not being overvalued, which is a combination that matters for a strategy built around sustainable expansion.
The key growth metrics from the fundamental report:
- Revenue growth (year-over-year): 29.76%
- EPS growth (year-over-year): 59.64%
- Average historical EPS growth: 34.36% per year
- Expected EPS growth: 25.04% per year on average
- Expected revenue growth: 16.19% per year on average
The report also points to improving margins. Operating margin sits at 8.03%, and gross margin has moved higher over the past couple of years. That is meaningful because margin expansion often signals that a company is not just growing, but growing with more pricing power or operating efficiency.
The health score is lower at 6 out of 10, and it is worth acknowledging the concerns. Debt-to-equity is elevated at 1.48, and the debt-to-FCF ratio of 6.40 suggests that free cash flow would need more than six years to pay down all debt. Those are real limitations. Still, liquidity is strong, with a current ratio of 2.58 and a quick ratio of 2.46, and the Altman-Z score of 3.70 points to a low near-term bankruptcy risk. For a growth screen, the key takeaway is that the company has been funding strong expansion without the balance sheet becoming an immediate problem.
Investors who want the complete fundamental breakdown can use the detailed fundamental analysis report to review all of the underlying metrics.
The technical setup is about timing, not just trend
The technical picture is more nuanced. Dycom's overall technical rating is only 5 out of 10, but the setup rating is notably better at 7 out of 10. That distinction is exactly what this screen is designed to catch. A stock does not need to be in a perfect uptrend to present a good risk-reward entry; it needs a price structure that is coiling and preparing for a move.
The technical report highlights several elements that make the current level interesting:
- 12-month performance: +46.38%, outperforming 81% of all stocks
- Current price: $408.59, in the middle of the recent 370.44 to 450.00 trading range
- Support zone: $399.27 to $401.06, with additional support at $373.34 and $362.60
- Resistance: $440.40 and $471.64
- Reduced volatility after recent consolidation, with little overhead resistance immediately above
The stock has pulled back in the short term, with a 1-month return of -4.24% and a 3-month return of -4.60%. That is part of the reason the overall technical rating is medium. But the setup rating reflects the other side of the story: prices are consolidating, a support zone has formed below, and the nearest resistance is not far above. That can set up a breakout trade if the stock can push through the upper end of its range.
For a full view of the support and resistance levels, the technical analysis report provides the complete chart-based assessment.
Why this combination matters for the strategy
The reason this screen exists is that strong fundamentals and strong chart timing rarely arrive at the same moment. Buying a growing company before the chart is ready often means sitting through prolonged drawdowns. Waiting for a perfect chart without checking the fundamentals can lead into broken growth stories. Dycom sits in a more interesting spot: the fundamentals still show strong momentum, while the technical setup suggests the stock has built a base and may be near a decision point.
The growth numbers are not just historical. Expected EPS growth of 25% per year and expected revenue growth of 16% per year suggest the market is modeling continued expansion, and the fundamentally driven report notes that earnings are expected to grow around 30.75% in the coming years. The valuation screen also helps; the forward P/E of 19.86 and a low PEG ratio suggest the stock is not priced as if all of that growth is already in the price.
Risks remain. The debt ratios warrant monitoring, especially if rates stay elevated. The technical trends are neutral, so there is no confirmed breakout yet. The setup is promising, not guaranteed. But for investors who want to combine growth strength with a technical entry framework, Dycom is a reasonable candidate under this methodology.
More stocks matching this same combination of strong growth, decent profitability and health, and technical setups can be found on the Strong Growth screen with good technical setup ratings.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
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Dycom Industries (NYSE:DY): Strong Growth With a Favorable Technical Setup
Growth screening often fails when investors focus only on earnings and revenue, ignoring whether the chart is ready to cooperate. The Strong Growth screen with good technical setup ratings is designed to close that gap: it starts with companies that are growing strongly, while still showing decent profitability and health, and then filters for technical breakout patterns that can improve the timing of an entry. DYCOM INDUSTRIES INC (NYSE:DY) is one company that comes through that screen with an interesting mix of fundamental momentum and a consolidating price structure.
Fundamental support for a growth thesis
Dycom's ChartMill fundamental report gives the company a rating of 6 out of 10, but the underlying breakdown is more encouraging for growth-focused investors. The growth component scores 8 out of 10, and profitability comes in at 7 out of 10. The report describes Dycom as showing excellent growth while not being overvalued, which is a combination that matters for a strategy built around sustainable expansion.
The key growth metrics from the fundamental report:
The report also points to improving margins. Operating margin sits at 8.03%, and gross margin has moved higher over the past couple of years. That is meaningful because margin expansion often signals that a company is not just growing, but growing with more pricing power or operating efficiency.
The health score is lower at 6 out of 10, and it is worth acknowledging the concerns. Debt-to-equity is elevated at 1.48, and the debt-to-FCF ratio of 6.40 suggests that free cash flow would need more than six years to pay down all debt. Those are real limitations. Still, liquidity is strong, with a current ratio of 2.58 and a quick ratio of 2.46, and the Altman-Z score of 3.70 points to a low near-term bankruptcy risk. For a growth screen, the key takeaway is that the company has been funding strong expansion without the balance sheet becoming an immediate problem.
Investors who want the complete fundamental breakdown can use the detailed fundamental analysis report to review all of the underlying metrics.
The technical setup is about timing, not just trend
The technical picture is more nuanced. Dycom's overall technical rating is only 5 out of 10, but the setup rating is notably better at 7 out of 10. That distinction is exactly what this screen is designed to catch. A stock does not need to be in a perfect uptrend to present a good risk-reward entry; it needs a price structure that is coiling and preparing for a move.
The technical report highlights several elements that make the current level interesting:
The stock has pulled back in the short term, with a 1-month return of -4.24% and a 3-month return of -4.60%. That is part of the reason the overall technical rating is medium. But the setup rating reflects the other side of the story: prices are consolidating, a support zone has formed below, and the nearest resistance is not far above. That can set up a breakout trade if the stock can push through the upper end of its range.
For a full view of the support and resistance levels, the technical analysis report provides the complete chart-based assessment.
Why this combination matters for the strategy
The reason this screen exists is that strong fundamentals and strong chart timing rarely arrive at the same moment. Buying a growing company before the chart is ready often means sitting through prolonged drawdowns. Waiting for a perfect chart without checking the fundamentals can lead into broken growth stories. Dycom sits in a more interesting spot: the fundamentals still show strong momentum, while the technical setup suggests the stock has built a base and may be near a decision point.
The growth numbers are not just historical. Expected EPS growth of 25% per year and expected revenue growth of 16% per year suggest the market is modeling continued expansion, and the fundamentally driven report notes that earnings are expected to grow around 30.75% in the coming years. The valuation screen also helps; the forward P/E of 19.86 and a low PEG ratio suggest the stock is not priced as if all of that growth is already in the price.
Risks remain. The debt ratios warrant monitoring, especially if rates stay elevated. The technical trends are neutral, so there is no confirmed breakout yet. The setup is promising, not guaranteed. But for investors who want to combine growth strength with a technical entry framework, Dycom is a reasonable candidate under this methodology.
More stocks matching this same combination of strong growth, decent profitability and health, and technical setups can be found on the Strong Growth screen with good technical setup ratings.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »