A strong-growth screen is designed to find companies where the underlying business is compounding at a rapid clip, while the chart simultaneously starts to validate that traction with a breakout pattern. The idea is simple: the fundamentals tell you what to buy, and the technicals tell you when to buy it. CAREDX INC (NASDAQ:CDNA) stands out under this methodology, combining strong revenue and earnings growth with a healthy balance sheet and a technical setup that is currently resolving to the upside.
What the strong growth and technical setup screen seeks
The screen explicitly targets a specific combination of characteristics rather than any single metric. It filters for:
- Revenue and earnings growth well above market averages
- Decent profitability and financial health scores, so the expansion is not built on fragile leverage
- A technical setup that suggests an emerging or continuing uptrend, often through a consolidation or breakout pattern
Companies that pass all three hurdles are rarer than those that merely grow quickly. Many high-growth stories fail on the health check, and many technically strong names lack the fundamental momentum to justify a sustained move. CareDx clears all three gates.
Fundamentals: growth and health are both strong
CareDx, a transplant diagnostics company, has been growing at a pace that puts it near the top of its industry. The most striking figure is earnings per share growth of 117.65% over the last year, with revenue up 34.41% in the same period. That kind of operating leverage is exactly what growth investors look for: the top line is expanding, and the bottom line is growing even faster.
The fundamental report confirms that this is not a one-off quarter. Measured over the past years, EPS has grown by an average of 21.81% annually, while revenue has compounded at 14.59% per year. Forward estimates are also strong, with EPS expected to grow another 37.87% annually and revenue projected to grow 11.46% per year. The growth rating comes in at 8 out of 10.
Crucially, the balance sheet supports the expansion. CareDx carries no outstanding debt, so its Debt/Equity and Debt/FCF ratios are zero. The Altman-Z score of 14.68 indicates a very low risk of financial distress, and the current ratio of 4.58 shows the company can comfortably meet short-term obligations. The health rating is 8 out of 10.
Profitability is decent but not exceptional, which is part of the reason the overall fundamental rating lands at 7 out of 10. Return on invested capital is a standout at 19.97%, better than 97% of industry peers, and the gross margin of 70.58% gives the business pricing power. But CareDx reported negative earnings in four of the past five years and pays no dividend, so it remains a pure growth story rather than a mature cash generator. Investors who want to review the full fundamental breakdown can check this fundamental analysis report.
Technical picture: trend strength and a setup resolving higher
The technical side is where CareDx becomes especially interesting for a growth screen. The stock carries a technical rating of 10 out of 10, with both the short-term and long-term trends positive. Its relative strength is 99.14, meaning it has outperformed more than 99% of the market over the trailing year. The one-year performance is up 247.73%, and the stock is currently trading near its 52-week high while the S&P 500 remains below its own high. That leadership is a key marker for growth-oriented technical strategies.
The setup rating is 7 out of 10, which suggests the stock is not chasing a parabolic move but rather forming a constructive consolidation before a potential push higher. The report identifies a resistance zone near 48.62 and a support zone spanning 44.84 to 45.31, created by a combination of trend lines and moving averages. A suggested breakout entry sits just above that resistance, with a stop below the support zone.
The technical report also notes a recent Pocket Pivot signal, an accumulation pattern where price rises on volume that exceeds the prior down-volume. Large players are showing interest, which adds conviction to the breakout case. The stock is liquid, with an average daily volume of about 1.14 million shares, which makes position management easier. More detail on the technical setup and the current price action can be found in the technical analysis report.
Why these criteria matter for growth investors
The combination of strong fundamentals and a healthy technical setup is the core of this strategy. A company can grow revenue for years and still be a poor investment if the stock is already priced for perfection or if the balance sheet is too fragile to fund further expansion. CareDx addresses those concerns: the growth is real, the leverage is zero, and the market is rewarding the story with persistent trend strength.
That does not mean the stock is without risk. The P/E ratio of 42.79 is expensive on an absolute basis, although it is cheaper than 92.58% of the biotechnology industry. The company has a history of negative earnings, so the current profitability is relatively recent and could be fragile. A growth strategy should always account for the possibility that the market regime shifts and high-multiple names de-rate quickly.
The screen is built to surface these kinds of situations before they become obvious to the broader market. When a company shows accelerating growth, a clean balance sheet, and a technical breakout all at once, it often marks the early stage of a sustained move. CareDx fits that profile today, and the strategy rewards patience in holding positions while the growth story plays out.
Other screens confirm the setup
The primary screen is not the only one flagging CareDx. The Fastest Growing Stocks screen confirms that CDNA’s strong earnings and sales growth is supported by healthy fundamentals and durable business momentum, while the Strong Momentum Stocks screen reinforces the technical picture by showing CDNA already in a confirmed uptrend with strong recent price action. Together, these screens support the core thesis of a high-growth stock whose chart is also participating in the move.
Investors who want to identify additional stocks that combine strong growth with favorable technical setups can use this screen to run the same methodology across the broader market.
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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CareDx (NASDAQ:CDNA) Combines Strong Growth With a Bullish Technical Setup
A strong-growth screen is designed to find companies where the underlying business is compounding at a rapid clip, while the chart simultaneously starts to validate that traction with a breakout pattern. The idea is simple: the fundamentals tell you what to buy, and the technicals tell you when to buy it. CAREDX INC (NASDAQ:CDNA) stands out under this methodology, combining strong revenue and earnings growth with a healthy balance sheet and a technical setup that is currently resolving to the upside.
What the strong growth and technical setup screen seeks
The screen explicitly targets a specific combination of characteristics rather than any single metric. It filters for:
Companies that pass all three hurdles are rarer than those that merely grow quickly. Many high-growth stories fail on the health check, and many technically strong names lack the fundamental momentum to justify a sustained move. CareDx clears all three gates.
Fundamentals: growth and health are both strong
CareDx, a transplant diagnostics company, has been growing at a pace that puts it near the top of its industry. The most striking figure is earnings per share growth of 117.65% over the last year, with revenue up 34.41% in the same period. That kind of operating leverage is exactly what growth investors look for: the top line is expanding, and the bottom line is growing even faster.
The fundamental report confirms that this is not a one-off quarter. Measured over the past years, EPS has grown by an average of 21.81% annually, while revenue has compounded at 14.59% per year. Forward estimates are also strong, with EPS expected to grow another 37.87% annually and revenue projected to grow 11.46% per year. The growth rating comes in at 8 out of 10.
Crucially, the balance sheet supports the expansion. CareDx carries no outstanding debt, so its Debt/Equity and Debt/FCF ratios are zero. The Altman-Z score of 14.68 indicates a very low risk of financial distress, and the current ratio of 4.58 shows the company can comfortably meet short-term obligations. The health rating is 8 out of 10.
Profitability is decent but not exceptional, which is part of the reason the overall fundamental rating lands at 7 out of 10. Return on invested capital is a standout at 19.97%, better than 97% of industry peers, and the gross margin of 70.58% gives the business pricing power. But CareDx reported negative earnings in four of the past five years and pays no dividend, so it remains a pure growth story rather than a mature cash generator. Investors who want to review the full fundamental breakdown can check this fundamental analysis report.
Technical picture: trend strength and a setup resolving higher
The technical side is where CareDx becomes especially interesting for a growth screen. The stock carries a technical rating of 10 out of 10, with both the short-term and long-term trends positive. Its relative strength is 99.14, meaning it has outperformed more than 99% of the market over the trailing year. The one-year performance is up 247.73%, and the stock is currently trading near its 52-week high while the S&P 500 remains below its own high. That leadership is a key marker for growth-oriented technical strategies.
The setup rating is 7 out of 10, which suggests the stock is not chasing a parabolic move but rather forming a constructive consolidation before a potential push higher. The report identifies a resistance zone near 48.62 and a support zone spanning 44.84 to 45.31, created by a combination of trend lines and moving averages. A suggested breakout entry sits just above that resistance, with a stop below the support zone.
The technical report also notes a recent Pocket Pivot signal, an accumulation pattern where price rises on volume that exceeds the prior down-volume. Large players are showing interest, which adds conviction to the breakout case. The stock is liquid, with an average daily volume of about 1.14 million shares, which makes position management easier. More detail on the technical setup and the current price action can be found in the technical analysis report.
Why these criteria matter for growth investors
The combination of strong fundamentals and a healthy technical setup is the core of this strategy. A company can grow revenue for years and still be a poor investment if the stock is already priced for perfection or if the balance sheet is too fragile to fund further expansion. CareDx addresses those concerns: the growth is real, the leverage is zero, and the market is rewarding the story with persistent trend strength.
That does not mean the stock is without risk. The P/E ratio of 42.79 is expensive on an absolute basis, although it is cheaper than 92.58% of the biotechnology industry. The company has a history of negative earnings, so the current profitability is relatively recent and could be fragile. A growth strategy should always account for the possibility that the market regime shifts and high-multiple names de-rate quickly.
The screen is built to surface these kinds of situations before they become obvious to the broader market. When a company shows accelerating growth, a clean balance sheet, and a technical breakout all at once, it often marks the early stage of a sustained move. CareDx fits that profile today, and the strategy rewards patience in holding positions while the growth story plays out.
Other screens confirm the setup
The primary screen is not the only one flagging CareDx. The Fastest Growing Stocks screen confirms that CDNA’s strong earnings and sales growth is supported by healthy fundamentals and durable business momentum, while the Strong Momentum Stocks screen reinforces the technical picture by showing CDNA already in a confirmed uptrend with strong recent price action. Together, these screens support the core thesis of a high-growth stock whose chart is also participating in the move.
Investors who want to identify additional stocks that combine strong growth with favorable technical setups can use this screen to run the same methodology across the broader market.
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 »