Evaluating ETON PHARMACEUTICALS INC (NASDAQ:ETON) using Mark Minervini’s winning stock formula

In this article we will dive into ETON PHARMACEUTICALS INC (NASDAQ:ETON) as a possible candidate for growth investing. Investors should always do their own research, but we noticed ETON PHARMACEUTICALS INC showing up in our Minervini growth screen, which makes it worth to investigate a bit more.

Checking the Minervini Trend Template.

ETON checks all the boxes when evaluating the Minervini Trend Template. This is a set of basic technical criteria to identify stocks in strong uptrends:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Some of the high growth metrics of ETON highlighted

To evaluate a stock's growth potential, ChartMill utilizes a High Growth Momentum Rating (HGM) on a scale of 0 to 10. This assessment considers various growth and profitability aspects, like EPS and revenue growth, accelleration, surprises and revisions. ETON has achieved a 4 out of 10:

Earnings Momentum

• The EPS of ETON has exhibited growth from one quarter to another (Q2Q), with a 77.78% increase. This underscores the company's ability to generate higher earnings and improve its financial standing.
• The recent q2q revenue growth of 59.26% of ETON showcases the company's ability to generate increasing revenue in a short period, reflecting its positive growth trajectory.
• ETON shows accelerating Sales growth: when comparing the current Q2Q growth of 59.26% to the previous quarter Q2Q growth of 46.86%, we see the growth rate improving.
• Sales growth accelerated for 2 quarters in a row.
• ETON has achieved significant 1-year revenue growth of 23.28%, signaling its ability to capture market opportunities and drive top-line expansion. This growth indicates the company's effective execution and its potential for continued success.

Financial Strength & Profitability

• With a current Debt-to-Equity ratio at 1.22, ETON showcases its disciplined capital structure. The company's prudent management of debt obligations contributes to its financial stability and long-term sustainability.

Strong Market Performance

• The Relative Strength (RS) of ETON has been consistently solid, with a current 99.3 rating. This highlights the stock's ability to exhibit sustained price strength and signifies its competitive advantage.

Looking at the Setup

ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. ETON currently holds a 3 as its setup rating, suggesting a particular level of consolidation in the stock.

Although ETON has an excellent technical rating, it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

Our latest full technical report of ETON contains the most current technical analsysis.

Concluding

More ideas for high growth momentum stocks can be found on ChartMill in our High Growth Momentum + Trend Template screen.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.