Normal News-Driven Wobble
We had written lately that the market had been extremely quiet in recent weeks ... possibly a bit too quiet, as the market has a way of hitting a pothole after a period of calm. Sure enough, we saw some growth stocks ease early last week, and then the Middle East attacks and counterattacks caused selling on Friday. Even so, it’s been a normal wobble so far, with leading stocks and major indexes holding support, and today’s bounce is obviously a good sign. Of course, things are likely to be tricky and news-driven in the near term based on the happenings in the Middle East, so it’s key to remain flexible—and let’s not forget that, to this point, we still haven’t seen an overwhelming number of stocks break out on the upside (many that tried in the past two or three weeks have turtled back into their consolidations). Overall, though, just about all of the intermediate-term evidence remains bullish, so while we’re not cannonballing into the pool, we continue to lean bullish and are looking for lower-risk entries in strong names. We’ll leave our Market Monitor at a level 7 today.
This week’s list is surprisingly growth-y, with many names from different sectors at or threatening new high ground. Our Top Pick is Life 360 (LIF), which is admittedly a bit thinly traded and will be volatile, but looks to be near a decent entry after a humongous rally from early April to late May.
Price |
Alnylam Pharmaceuticals (ALNY) |
CoreWeave (CRWV) |
CrowdStrike (CRWD) |
Guardant Health (GH) |
Life360 (LIF) ★ Top Pick ★ |
Oracle (ORCL) |
Royalty Pharma (RPRX) |
TechnipFMC (FTI) |
Wingstop (WING) |
Woodward (WWD) |
Stock 1
Alnylam Pharmaceuticals (ALNY)
Price |
Why the Strength
RNA interference (RNAi) is a revolutionary therapeutic approach focused on “silencing” a wide variety of genes that cause or contribute to various diseases, including genes involved in normal cellular functions. At the forefront of this new technology is Massachusetts-based Alnylam, which is focused on the discovery and commercialization of therapies for rare diseases for which there are limited or inadequate treatment options. The company’s six commercial approvals include three medications for treating hATTR Amyloidosis Polyneuropathy (or hATTR-PN, which is a rare, inherited disease leading to the abnormal buildup of amyloid deposits in various organs), plus treatments for abnormally high blood cholesterol and various liver diseases. In March, the FDA approved a supplemental label addition for the company’s RNAi therapy Amvuttra—for cardiomyopathy of wild-type or hereditary transthyretin-mediated amyloidosis (ATTR-CM) in adults—which made Amvuttra the first RNAi therapeutic approved by the FDA to address both cardiomyopathy and polyneuropathy from ATTR amyloidosis (and a big reason for the stock’s recent strength). Last week, Alnylam made headlines again when the European Commission approved a label expansion for Amvuttra for the same indication, a nod that follows a similar approval in Brazil while expanding Alnylam’s global footprint for the drug—projected to experience strong growth in the coming years as RNAi technology, along with improvements in genetic testing, gains greater acceptance. (By some estimates, Amvuttra’s cardiomyopathy indication alone could be worth over $6 billion down the road.) On the financial front, Alnylam posted a solid beat across both headline metrics in Q1, with revenue of $594 million increasing 20% year-on-year, while the bottom line was nearly breakeven. The strong results were led by a 36% jump in global Amvuttra sales and an 8% increase in revenues for the liver drugs Givlaari and Oxlumo. Management also highlighted the FDA approval of Qfitilia (for treating bleeding episodes in individuals diagnosed with hemophilia A or B), which is the sixth Alnylam-discovered RNAi therapy approved in the U.S. Looking ahead, the firm is focused on commercializing multiple near- and mid-stage therapies, which it believes represent “blockbuster opportunities across multiple therapeutic areas.” Analysts see top- and bottom-line growth of 30% this year, while earnings should roar into the black in 2026.
Technical Analysis
After a tedious 17-month correction, ALNY blasted off last June following strong trial results for a heart drug study. It eventually rallied to 300 in October, and that level rejected the stock at that time, again in January and a third time in March before shares knifed lower into the market’s April bottom. However, ALNY picked up steam after that, with solid accumulation in the past month as the stock has nosed above resistance. We’re OK with a small buy on a bit more strength.
Market Cap | $36.4B | EPS $ Annual (Dec) | ||
Forward P/E | N/A | FY 2023 | -1.61 | |
Current P/E | N/A | FY 2024 | -0.02 | |
Annual Revenue | $2.35B | FY 2025e | -0.85 | |
Profit Margin | N/A | FY 2026e | 1.82 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 594 | 20% | -0.01 | N/A |
One qtr ago | 593 | 35% | 0.06 | N/A |
Two qtrs ago | 501 | -33% | -0.50 | N/A |
Three qtrs ago | 660 | 107% | 0.58 | N/A |
Weekly Chart | Daily Chart |
Stock 2
CoreWeave (CRWV)
Price |
Why the Strength
CoreWeave operates a cloud platform that provides compute support, scaling and acceleration for Generative AI on behalf of (normally huge) enterprises. After years of being private and getting Nvidia as a backer (it’s a shareholder and provides the company first dibs on its newest and highest-performing chips), the company went public in March and has capitalized on the investor enthusiasm for AI, striking a deal with OpenAI just ahead of the IPO to provide AI infrastructure for the ChatGPT parent, expanding OpenAI’s global capacity and its ability to train its model at a value up to $11.9 billion over many years—and two months later the parties added another, separate, deal that will pay CoreWeave $4 billion through April 2029. Those partnerships and the springtime acquisition of a business called Weights & Biases and its 1,400 AI developer customers will help CoreWeave produce revenue around $5 billion this year, almost triple last year’s $1.7 billion and light years ahead of 2023’s $228 million sales. The fast growth of GenAI means the biggest constraint for the industry is capacity, which has provided CoreWeave with a massive revenue backlog of $25.9 billion at the end of the first quarter, which doesn’t include the second OpenAI contract. That requires a lot of capital expenditures, however, with CoreWeave spending $1.9 billion on CapEx in the first quarter, a figure that will jump to at least $3 billion for Q2. The reliance on OpenAI for more than half its revenue, as well as rising expenses – including $300 million in interest fees this quarter due to the firm’s huge debt load – are risks, but as long as AI doesn’t get another DeepSeek-like AI shock, it should all be manageable. Tariffs add another variable, but management said last month it doesn’t expect a meaningful hit to the cost side of the business, while demand appears unaffected. For the current quarter, look for sales of $1.08 billion, far more than double that of a year ago, and a net loss per share of $0.61, with a lot of focus on the revenue backlog as well. It’s a huge idea.
Technical Analysis
CRWV went public in late March at 40 and after a sharp dip and rebound (five weeks in all of post-IPO consolidation), and a bit of hesitation near the high near 60, it exploded higher on a stunning rise, with just one- or two-day sharp reversals on its way up to the mid-160s earlier this month. On a very short-term basis, CRWV has now hit resistance three times near 165 and started to rest a bit—it’s obviously a very high-risk, high-reward situation, but a small buy on further dips and a loose stop under the 25-day line is OK by us.
Market Cap | $70.8B | EPS $ Annual (Dec) | ||
Forward P/E | N/A | FY 2023 | -1.23 | |
Current P/E | N/A | FY 2024 | -1.28 | |
Annual Revenue | $2.51B | FY 2025e | -1.11 | |
Profit Margin | N/A | FY 2026e | -0.23 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 982 | 420% | -0.31 | N/A |
One qtr ago | 747 | 544% | -0.11 | N/A |
Two qtrs ago | 389 | 934% | -0.56 | N/A |
Three qtrs ago | 389 | 934% | -0.56 | N/A |
Weekly Chart | Daily Chart |
Stock 3
CrowdStrike (CRWD)
Price |
Why the Strength
Cybercrime—targeting both companies and governments—is surging worldwide, driven by the increased weaponization of AI in cyberattacks. Moreover, as large language models (LLMs, which are crucial for creating text-based AI content) move into production, risks to AI dramatically grow in the form of data poisoning, tampering and sensitive data leakage. This is where CrowdStrike (covered in the April 14 issue) enters the picture: It’s an emerging blue chip in the cybersecurity and network protection field, led by its AI-powered and cloud-native security platform, Falcon Cloud Security (which boasts a reputed 100% threat detection rate). The Falcon platform is a big reason for CrowdStrike’s excellent growth over the years, as it’s the firm’s current revenue driver—particularly Falcon Prevent (next-generation antivirus)—thanks to its strong uptake and high customer retention rates. Also helping is the company’s Falcon Flex subscription model, which provides customers with flexible licensing, allowing them to easily deploy and scale their use of the Falcon platform’s various modules based on their changing needs, and which encourages larger, longer-term commitments from enterprise clients. In its latest recognition of the growing threat that AI-driven cyberattacks pose, Crowdstrike announced last week that it has teamed up with Nvidia to offer full lifecycle protection for AI and over 100,000 LLMs—the integration enables customers to safely run and scale diverse LLM applications across hybrid and multi-cloud environments and actively protects against specific AI-driven threats by scanning for AI-specific indicators of attack (IOAs) and indicators of compromise (IOCs) in containers. Despite missing estimates, CrowdStrike’s fiscal Q1 (ended April) revenue of $1.1 billion increased 20% from a year ago, with earnings of 73 cents beating estimates by seven cents. The company said that across over 820 Flex customers, the average deal size is greater than $1 million in ending annual recurring revenue (ARR), with CrowdStrike reporting “accelerated customer adoption cycles” with some returning for additional purchases within months. Other highlights of the quarter include Falcon Flex deal momentum with accounts exceeding $3.2 billion in total deal value (up more than 6 times!), record cash flow from operations of $384 million and a 23% increase in free cash flow, with the mostly sanguine results prompting management to announce a share repurchase authorization of up to $1 billion. Going forward, Wall Street sees several quarters of steady 20%-ish revenue growth ahead as free cash flow expands.
Technical Analysis
CRWD broke out from a big base in February of this year and looked ready for a sustained run, but the market’s implosion got in the way, dragging the stock down into March. Shares did show relative strength (April low wasn’t lower than March) and then quickly rallied back to their old highs by early May, another good sign. CRWD has held the 25-day line on the way up, with even the post-earnings shake finding support. We’re OK starting a position here or on minor weakness.
Market Cap | $119B | EPS $ Annual (Jan) | ||
Forward P/E | 137 | FY 2024 | 3.09 | |
Current P/E | 129 | FY 2025 | 3.93 | |
Annual Revenue | $4.13B | FY 2026e | 3.52 | |
Profit Margin | 21.5% | FY 2027e | 4.70 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 1.10 | 20% | 0.73 | -8% |
One qtr ago | 1.06 | 25% | 1.03 | 8% |
Two qtrs ago | 1.01 | 29% | 0.93 | 13% |
Three qtrs ago | 0.96 | 32% | 1.04 | 41% |
Weekly Chart | Daily Chart |
Stock 4
Guardant Health (GH)
Price |
Why the Strength
Guardant Health is a leader in liquid biopsies, with a litany of testing offerings that allow patients and doctors to gain insights just from a couple tubes of blood, which is not only far less invasive than regular biopsies but also offers options for patients where a biopsy isn’t possible. The driver for years has been its Guardant 360 platform, which has a few different products that can detect gene mutations of cancer within patients to better inform a treatment course that could work (often used by those who aren’t seeing great progress with current treatments). Growth there has been solid for a while and should continue, but the excitement is about the firm’s newer offerings, the biggest of which is Shield: It’s now the first and only FDA approved blood test for colorectal cancer, which is a big improvement over colonoscopies and stool-based tests; others (like Exact Sciences) are working on their own versions of a blood test, but Shield is in the lead, with sales just starting in Q1 (9,000 tests yielded $5.7 million of revenue) and with the top brass seeing 55,000 tests for 2025 as a whole (which could prove conservative given that management significantly hiked its outlook after Q1 results). Shield is also in testing for detection of other cancers, with the ultimate goal of it being a broad-based detection platform. Then there’s Reveal, which is used as a test for cancer remittance—basically enabling a view (again, though a couple vials of blood) as to whether the treatment has been successful in eradicating the cancer; Reveal is the fastest-growing non-Shield test, with recent studies for colon and breast cancer coming back with excellent results. The main red flag here is the red ink—earnings are deep in the red and should stay that way for a while longer, but the focus for the next couple of quarters at least should be on the uptake for Shield and Reveal, which could drive a re-acceleration in top-line growth.
Technical Analysis
GH had a bottoming process from last spring through last fall before putting on a good show for three months, with shares ratcheting up to the 50 level. Shares acted very solidly during the market’s downturn, with a reasonable (30%-ish) dip into March and a higher low in April, but the breakout attempt after earnings on May 1 brought in a wave of selling, with GH returning to its March/April low area. Still, the 200-day line held, and we’re impressed with the stock’s rebound back to 50 on very good volume. It’s a tricky situation, but we’re OK buying some on a move up from here, with a looser stop in the mid-40s.
Market Cap | $6.15B | EPS $ Annual (Dec) | ||
Forward P/E | N/A | FY 2023 | -3.15 | |
Current P/E | N/A | FY 2024 | -2.01 | |
Annual Revenue | $775M | FY 2025e | -2.75 | |
Profit Margin | N/A | FY 2026e | -2.33 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 204 | 21% | -0.49 | N/A |
One qtr ago | 202 | 30% | -0.62 | N/A |
Two qtrs ago | 192 | 34% | -0.45 | N/A |
Three qtrs ago | 177 | 29% | -0.48 | N/A |
Weekly Chart | Daily Chart |
Stock 5
Life360 (LIF) ★ Top Pick ★
Price |
Why the Strength
Life360 is positioning itself as the go-to app and service for families that want an extra layer of safety and contact with each other—the app allows members to track their loved ones’ (even items or pets) locations, get notifications when they arrive or leave a desigated place (soccer practice, etc.), message directly in the app and (for paying members) even having crash detection and emergency dispatch services. (It’s actually the 13th most popular app overall on the App Store.) People sign up in “circles” (an entire family can be in one circle), with a surprisingly broad user base, including 17% of circles being couples and 35% families with teens, but that leaves nearly 50% outside of those categories. Life360 sells via a freemium model—there are 84 million monthly users worldwide, and one of the big focuses of the firm these days is to build out its advertising model for those using it for free (ad and data sharing revenue in Q1 doubled from a year ago and makes up 12% of the total top line). That said, subscriptions (from $8 to $25 per month) offer added services and tracking, are growing nicely (up 33% from last year) and make up the vast majority of business today. Tons of the sub-metrics are appealing (one in seven U.S. smartphone owners have Life 360 and they open the app an average of five times per day), and with the firm likely to move into more services (like elderly monitoring) while building out its revenue streams (especially the aforementioned advertising and data monetization), the potential is huge for continued uptake, especially as there’s so much whitespace even in the U.S. (just 15% penetrated). Sales have grown north of 30% each of the past two quarters, while earnings have been in the black for three straight, and analysts see the bottom line booming going forward as circle membership (up 26% in Q1) and revenue per user (up 8%) head higher. We think it’s a great story.
Technical Analysis
We wrote up LIF about a month ago, after it staged a stunning six-week run to new highs, highlighted by a big-volume breakout after earnings. Shares never dipped into our buy range after that, but we’re thinking the recent pullback may provide an opportunity—LIF continued to crawl higher to nearly 66 (despite a dilutive convertible bond offering), but now it’s eased lower as the 25-day line has caught up. LIF is still a bit thinly traded, so while we’re OK buying around here, consider keeping position sizes small and using a loose stop.
Market Cap | $4.70B | EPS $ Annual (Dec) | ||
Forward P/E | 82 | FY 2023 | -0.42 | |
Current P/E | 702 | FY 2024 | -0.06 | |
Annual Revenue | $398M | FY 2025e | 0.75 | |
Profit Margin | 4.0% | FY 2026e | 1.19 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 104 | 32% | 0.05 | N/A |
One qtr ago | 116 | 33% | 0.10 | N/A |
Two qtrs ago | 92.9 | 18% | 0.09 | N/A |
Three qtrs ago | 84.9 | 20% | -1.50 | N/A |
Weekly Chart | Daily Chart |
Stock 6
Oracle (ORCL)
Price |
Why the Strength
Oracle is a blue-chip outfit recognized for its hardware and cloud-based software-as-a-service (SaaS) offerings, which lead sales across multiple segments in the computing space. Its hardware products include engineered systems, servers and storage solutions, while its SaaS solutions are primarily focused on cloud infrastructure, enterprise applications and AI-driven services. Cloud services and infrastructure expansion have been the sales growth leaders for Oracle lately, and to that end, its collection of enterprise software solutions—including Oracle E-Business Suite (for automating various enterprise-wide tasks), PeopleSoft (for managing human resources, customer relations and supply chains) and Oracle Retail (for enhancing various retail operations) are benefiting from ongoing cloud expansion. In fact, the company is expected to see its cloud infrastructure revenue increase around 70% year-on-year for fiscal 2026 (which just began this month). Moreover, recent sales trends show that a growing number of businesses are adopting Oracle’s applications and databases to improve scalability, performance and cybersecurity for AI workloads. Indeed, Oracle appears to be capitalizing on the accelerating AI buildout trend as total remaining performance obligations (RPOs, or unearned revenue from signed contracts) are expected to grow by more than 100% this fiscal year (versus 41% last year), driven by robust demand in both AI and non-AI workloads. Last week’s fiscal Q4 results highlighted a number of additional growth opportunities for Oracle and featured revenue of nearly $16 billion increasing 11%, led by a 52% jump in cloud infrastructure revenue, while per-share earnings of $1.70 beat estimates by six cents. As a result of the strength in its cloud applications and infrastructure, including database services, management raised revenue guidance for fiscal 2026 to over $67 billion (up 16%, accelerating from recent quarters) if realized, prompting several major institutions to upgrade the shares (reasons for the stock’s latest strength). Analysts see 12% earnings growth this year, with many years of 20%-ish growth after that.
Technical Analysis
ORCL stair-stepped out of a big consolidation starting in early 2024, with big earnings moves that month, in June and again in September eventually leading to a run to 200 near year-end. Then came the correction, which took the stock down 40% in a couple of stages into the market low. But it’s been almost all up since mid-April, and last week’s massive-volume post-earnings rally brings up an old rule of ours: “Never underestimate a big, liquid name that’s showing extreme strength.” We’re not chasing ORCL here, but entering on a bit more weakness with a stop near 185 would be tempting.
Market Cap | $604B | EPS $ Annual (May) | ||
Forward P/E | 32 | FY 2024 | 5.56 | |
Current P/E | 33 | FY 2025 | 6.03 | |
Annual Revenue | $57.4B | FY 2026e | 6.77 | |
Profit Margin | 38.2% | FY 2027e | 8.18 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 15.9 | 11% | 1.70 | 4% |
One qtr ago | 14.1 | 6% | 1.47 | 4% |
Two qtrs ago | 14.1 | 9% | 1.47 | 10% |
Three qtrs ago | 13.3 | 7% | 1.39 | 17% |
Weekly Chart | Daily Chart |
Stock 7
Royalty Pharma (RPRX)
Price |
Why the Strength
Royalty Pharma buys drugmaker royalties on existing treatments and invests in developmental drug research and development at companies that need funding for the last mile to get to market—also in return for royalty streams for when the treatments hit the market. The company is the largest publicly traded drug royalty business, with a portfolio of 35-plus regulator-approved products that includes 15 blockbusters—those treatments generating more than $1 billion in annual sales. Think of the business as a biotech-focused alternative asset manager: Royalty Pharma is agnostic around type of therapy, modality and the drug class it buys into. Instead, management seeks to use its financial expertise to help facilitate transactions while seeking out treatments it believes fill an unmet need in the market and so have a greater likelihood of generating meaningful and long-lasting income. The business spends big to acquire rights, aiming to deploy $2 billion to $2.5 billion annually on new income streams. Over its 30-year history, Royalty Pharma has seen about a 13% annual return, not accounting for its use of leverage—indeed, royalty revenue advanced 13% last year (8%, 12% and 15% the three years before that), with Q1’s tally up 12%. Add in some other receipts and the firm produces plenty of cash for investments, debt repayments or shareholder returns (share count down by 3% total in the past five quarters); in Q1, base cash flow after interest payments was $611 million, or about $1.05 per share. (The valuation here is another plus, with shares trading at less than 10x projected earnings and base cash flow.) Royalty Pharma’s long track record of finding strong deals bodes well for income continuing to rise steadily, especially since the current portfolio’s duration averages 13 years. That has consensus estimates for quarterly revenue through this year around $750 million a period, although Royalty Pharma beat that handily in Q1. The leverage used by the business makes interest rate risk a key variable, but investors are finally looking past that. Helping sentiment has been a restructuring that sliced out a management fee paid to a related business, which should also help the bottom line. Bottom line, growth here should be reliable, and the valuation is supportive of further gains.
Technical Analysis
After an endless bottoming effort, RPRX shattered long-term resistance at the start of the year, soaring into the mid-30s on many weeks of big, above-average volume. The 34 area finally brought in the sellers, with an ugly decline in March, but the overall rest period from February through last week was normal—and now RPRX is breaking out again, with three straight big-volume buying days last week, bringing shares to their highest levels since mid-2023. We’re OK entering here.
Market Cap | $19.7B | EPS $ Annual (Dec) | ||
Forward P/E | 8 | FY 2023 | 2.53 | |
Current P/E | 15 | FY 2024 | 1.91 | |
Annual Revenue | $2.26B | FY 2025e | 4.41 | |
Profit Margin | 56.3% | FY 2026e | 5.02 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 568 | 0% | 0.55 | 999% |
One qtr ago | 594 | 0% | 0.35 | -68% |
Two qtrs ago | 565 | 5% | 1.21 | 656% |
Three qtrs ago | 537 | 0% | 0.23 | -54% |
Weekly Chart | Daily Chart |
Stock 8
TechnipFMC (FTI)
Price |
Why the Strength
The latest geopolitical flareup involving Israel and Iran has put oil-related companies in the proverbial catbird’s seat. U.K.-based TechnipFMC is well positioned on both fronts as a leader in the design, engineering and manufacture of systems used to access energy resources both offshore and onshore—and most importantly, having what are regarded as the world’s most advanced exploration submarines. With rising oil prices widely expected in the wake of accelerating Middle East tensions, analysts foresee a potential increase in upstream spending across the broader energy sector, which should help boost both TechnipFMC’s subsea and surface projects on the margin. The company already has a strong presence in the Middle East region (which accounts for the bulk of its international earnings), and while it’s possible the recent Israel/Iran conflict may stall energy and production activity in the region, analysts have noted that past recent conflicts (including the one in Ukraine) have more often than not resulted in accelerated activity by governments pushing to lock in domestic and regional production to ensure energy security. Beyond the Middle East, Technip is increasing its footprint in other regions of the globe, including a new strategic alliance with Cairn Oil and Gas to deliver future deepwater developments in offshore India using the company’s vertically-integrated NiEPCI contracting model (which combines engineering, procurement, construction and installation). The company also sees the potential for expanding activity in emerging markets like Guyana and Suriname, with its subsea list there growing more than 20% year over year in Q1. Further highlights of the quarter included the revenue backlog of $16 billion being not only miles larger than annual revenue but growing much faster (up 17% compared to Q1 revenues up 9%). And while EPS of 33 cents missed estimates by two cents, it increased by 50% from a year ago. Looking ahead, the top brass estimates that 95% of total company revenue in 2025 will be generated from activity outside of the U.S. land market and sees another $10 billion in inbound subsea orders for 2026, while Wall Street expects 14% bottom-line growth this year and 21% next—and those estimates are likely based on mundane prices and a slow industry environment that could be changing.
Technical Analysis
Oil stocks have been the dog’s dinner for a while, but FTI has managed to hold somewhat near its highs in a big sign of relative sector strength. Indeed, shares nearly hit a new high in early April before getting yanked down by the big market downturn—but it’s been up nicely since then, with a return to resistance in early May, a dip to the 25-day line and now a rush to new highs. We’ll set our buy range down a bit from here, aiming to enter after an exhale following the recent run-up.
Market Cap | $14.4B | EPS $ Annual (Dec) | ||
Forward P/E | 17 | FY 2023 | 0.45 | |
Current P/E | 18 | FY 2024 | 1.82 | |
Annual Revenue | $9.28B | FY 2025e | 2.07 | |
Profit Margin | 10.4% | FY 2026e | 2.51 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($B) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 2.23 | 9% | 0.33 | 50% |
One qtr ago | 2.37 | 14% | 0.54 | 286% |
Two qtrs ago | 2.35 | 14% | 0.64 | 205% |
Three qtrs ago | 2.33 | 18% | 0.43 | 330% |
Weekly Chart | Daily Chart |
Stock 9
Wingstop (WING)
Price |
Why the Strength
Wingstop remains one of the best cookie-cutter stories in the market, and while there are periodic down times for the stock (often due to a natural slowing of growth, or sometimes higher chicken wing prices), the underlying growth story is powerful enough to create a new uptrend—which seems to be happening here. The company likely needs no introduction, with a basic offering of wings with a variety of rubs, spices and sauces, as well as chicken sandwiches (new as of a couple of years ago, helping to cut the firm’s exposure to volatile wing prices), tenders (relaunched this past quarter), fries, shakes and the usual comfort fare. The long-term aim has been to be a top 10 restaurant brand worldwide, and it’s making quick progress on that—in March, the firm had 2,689 locations (up 18% from a year ago), including 388 international franchised locations (up 27%), but sees potential for 10,000 (6,000 in the U.S.) eventually. The economics here have always been great (domestic average sales volume is $2.14 million per store, up 11% from a year ago; 70% payback of the initial investment within the first year), which means EBITDA and earnings have glided higher over time. As for same-store sales, they’ve been positive for an amazing 21 straight years, though there are ups and downs—which usually drive the stock higher or lower. Indeed, shares were in a multi-month downphase recently as this metric slowed (domestic same-store sales up just 0.5% in Q1, though that was impacted by weather including the California fires, as well as very tough comparables), but most see it bottoming out now-ish while some company initiatives (an AI-powered kitchen system that can predict order flow, cutting ticket times by 50% in the 200 restaurants it’s up and running, with a rollout brand-wide this year) likely to help. EBITDA was up 18% in Q1 and should pick up steam in the quarters ahead, too, as all the new openings (Q1 was a record quarter for that) get up and running. It’s not changing the world, but Wingstop’s growth story has a long way to run.
Technical Analysis
WING broke out with most growth stocks near Halloween 2023 and had an awesome run, riding its 10-week line up to 430 in June. But then came a two-month top and a huge decline as the market looked ahead to slower growth—egged on by this year’s market correction, shares fell a bit over 50% from their highs. But the April low for WING was near the March low (relative strength), and then earnings on April 30 kicked off a big, persistent run back into the 380s. The pullback since then has been sharp, but normal, looking like a knockout-type move. We’re OK with a nibble on a bit more weakness given the selling volume, with a stop toward the 300 area.
Market Cap | $9.88B | EPS $ Annual (Dec) | ||
Forward P/E | 91 | FY 2023 | 2.48 | |
Current P/E | 60 | FY 2024 | 3.70 | |
Annual Revenue | $652M | FY 2025e | 3.87 | |
Profit Margin | 22.3% | FY 2026e | 4.92 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 171 | 17% | 3.24* | 231%* |
One qtr ago | 162 | 27% | 0.92 | 44% |
Two qtrs ago | 163 | 39% | 0.88 | 28% |
Three qtrs ago | 156 | 45% | 0.93 | 63% |
Weekly Chart | Daily Chart |
Stock 10
Woodward (WWD)
Price |
Why the Strength
Surging demand in both the commercial aerospace and defense markets, along with global growth in gas turbine usage for “clean” power generation applications, is providing Woodward with sustained opportunities across multiple industries. The Colorado-based company manufactures control and conversion systems and components for gas turbines and their compressors used in power plants—including metering/control valves and custom control systems—for medical, oil/gas, transportation and aerospace/defense customers. The latter category accounts for the bulk of Woodward’s total revenue (over 80%), with aerospace customers the firm’s largest client base (60% or so of sales) and the defense aftermarket comprising roughly 22% of sales. Indeed, a growing focus for Woodward is the jet engine aftermarket, with exposure to many of today’s most widely used commercial jets, including high-bypass turbofan engines like CFM56, LEAP and GEnx. On a related note, the firm’s aerospace margins reached a record 22% in fiscal Q2 (ended March) due in equal parts to its improved scale, factory upgrades and better pricing; management further guided for margins to increase handily starting in the second half of 2025. Elsewhere, Woodward has strong exposure to the global marine market, which it said “remains healthy” as a result of high ship build rates that are boosting OEM engine demand and laying the groundwork for future aftermarket activity. (The firm just delivered the first production MicroNet XT Advanced Gas Turbine Control System for US Navy DDG-51 class destroyer shipboard gas turbine generators, and it has been selected as the preferred propulsion control system supplier for the South Korean Navy’s KDDX warship program.) In Q2, Woodward posted revenue of $884 million that increased 6% year-on-year, with earnings of $1.69 that beat estimates by 23 cents, driven largely by continued strong demand for smart defense and “robust” commercial aftermarket activity for legacy aircraft, prompting several Wall Street institutions to upgrade the shares (all reasons for the stock’s strength). Going forward, Wall Street sees several quarters of mid-to-upper teens percentage earnings growth ahead (accelerating from recent quarters), mainly on the back of steady strength in the commercial jet engine aftermarket.
Technical Analysis
WWD’s steady run higher was interrupted last June when it met with resistance around 190. After a sharp dip, the stock did push back to the 200 area last November and again in February, but the move wasn’t sustained, and shares had a huge shakeout with the market into its April low. However, WWD didn’t stay down for long and quickly returned to form, zooming past resistance and making new highs in the last few weeks. If you want to take a swing, we suggest entering on a pullback.
Market Cap | $13.8B | EPS $ Annual (Sep) | ||
Forward P/E | 37 | FY 2023 | 4.21 | |
Current P/E | 39 | FY 2024 | 6.11 | |
Annual Revenue | $3.36B | FY 2025e | 6.34 | |
Profit Margin | 14.2% | FYI 2026e | 7.44 |
Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
($M) | (vs. yr-ago-qtr) | ($) | (vs. yr-ago-qtr) | |
Latest qtr | 884 | 6% | 1.69 | 4% |
One qtr ago | 773 | -2% | 1.35 | -7% |
Two qtrs ago | 855 | 10% | 1.41 | 6% |
Three qtrs ago | 848 | 6% | 1.63 | 19% |
Weekly Chart | Daily Chart |
Previously Recommended Stocks
Date | Stock | Symbol | Top Pick | Original Buy Range | 6/16/25 |
HOLD | |||||
5/27/25 | ★ | 36.5-38.5 | 37 | ||
5/27/25 | 45-46 | 50 | |||
4/28/25 | 73.5-76 | 93 | |||
6/2/25 | 248-254 | 243 | |||
5/12/25 | 22-23 | 26 | |||
6/9/25 | 56-58.5 | 56 | |||
5/12/25 | 25-26 | 28 | |||
6/9/25 | 76-79 | 79 | |||
4/14/25 | 392-397 | 479 | |||
5/5/25 | 455-480 | 475 | |||
5/27/25 | 222-230 | 233 | |||
6/2/25 | 41-42.5 | 44 | |||
5/5/25 | 205-211 | 236 | |||
4/21/25 | ★ | 325-330 | 487 | ||
4/28/25 | ★ | 203-206 | 253 | ||
6/9/25 | 107-110 | 101 | |||
4/14/25 | 122-126 | 172 | |||
4/7/25 | ★ | 263-268 | 306 | ||
6/9/25 | 740-755 | 766 | |||
5/27/25 | 40.5-42 | 40 | |||
6/2/25 | 161-164 | 164 | |||
5/5/25 | 29-30 | 36 | |||
5/27/25 | 118.5-122 | 131 | |||
5/19/25 | 151-156 | 154 | |||
4/21/25 | 51-52 | 63 | |||
4/14/25 | 97.5-101 | 142 | |||
6/9/25 | 28.5-29.5 | 29 | |||
4/7/25 | 57-59 | 100 | |||
3/17/25 | 66.5-69 | 92 | |||
4/28/25 | 132-135 | 159 | |||
6/9/25 | 218-233 | 219 | |||
5/27/25 | 200-207 | 209 | |||
6/9/25 | 79-80.5 | 78 | |||
2/10/25 | ★ | 208-214 | 238 | ||
5/12/25 | 41.5-43 | 43 | |||
4/21/25 | 75.5-77 | 85 | |||
5/19/25 | 58.5-60.5 | 71 | |||
6/2/25 | ★ | 274-280 | 283 | ||
5/5/25 | Zscaler | ZS | ★ | 228-235 | 305 |
WAIT | |||||
None this week | |||||
SELL | |||||
5/19/25 | 127-131 | 124 | |||
5/19/25 | 198-202 | 201 | |||
5/27/25 | 100-104 | 105 | |||
5/27/25 | 58.5-60.5 | 53 | |||
6/2/25 | 25.5-27 | 26 | |||
5/12/25 | Royal Gold | RGLD | 180-183 | 180 | |
DROPPED | |||||
6/2/25 | 56-57.5 | 69 | |||
6/2/25 | 160-165 | 179 | |||
6/2/25 | 62-64.5 | 77 | |||
6/2/25 | 112.5-116 | 131 | |||
6/2/25 | 179-184 | 209 |
The next Cabot Top Ten Trader issue will be published on June 23, 2025.
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