Software maker Smartsheet has been burning up the road as profits and sales race ahead. Profit growth, though still small in dollar terms, ranged 150% to 260% over the past four quarters. That came on robust sales growth, ranging from 26% to 38%. On Monday the Relative Strength (RS) Rating for Smartsheet stock topped a technical benchmark. It rose into the 80-plus percentile with an improvement to 83, an 18-point jump from 65 the day before.
Smartsheet Stock Joins 80-Plus Club
The upgraded 83 RS Rating puts Smartsheet stock in the top 17% of all stocks, regardless of industry group, for price performance this past year. It's an especially significant move because a review of market history shows that the best stocks typically have an RS Rating north of 80 in the early stages of their moves.
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Additionally, like other software makers, Bellevue, Wash.-based Smartsheet is rapidly deploying artificial intelligence products, helping to boost Smartsheet stock.
"Using AI to solve customer problems is not a new idea for us here at Smartsheet," said Ben Canning, senior vice president, Product Management. In a report, Canning noted the company built custom AI models for customers even before generative AI took off this year.
"What is new is the class of powerful AI models, called foundation models, that can generate content largely indistinguishable from content created by humans. It's these foundation models that are defining a new era of AI," Canning said.
Working On Fresh Buy Point
A year ago, on Nov. 7, 2022, Smartsheet stock hit a multiyear low at 25.09 and began rising. It hit a 2023 high of 52.81 on June 7 this year and began consolidating. As a result, Smartsheet is trying to complete a consolidation pattern with a 52.81 buy point. See if the stock can break out in volume at least 40% higher than normal. On Monday it closed down 3% to 38.52.
The small-cap company reported a 16-cent per share profit last quarter. That was a powerful reversal from a 10-cent a share loss the same quarter a year earlier. Ostensibly that's a 260% improvement. Sales grew 26% to $235.6 million in its most recent quarter. The Street expects the company to report its latest earnings and sales numbers on or around Dec. 1.
Smartsheet stock holds the No. 20 rank among its peers in the 127-stock Computer Software-Enterprise industry group. Cloudflare and ServiceNow are among the group's highest-rated stocks.
One key to finding the best stocks to buy and watch is to keep an eye on the stock's relative price strength vs. other stocks.
The exclusive Relative Strength Rating from Investor's Business Daily tracks price performance with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the trailing 52 weeks holds up against all the other stocks in the IBD database.
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