A pattern of successive earnings-per-share improvements where the rate of growth is increasing, not just the level — a key signal of an accelerating business.
Deeper Explanation
O'Neil found that the greatest momentum stocks almost always showed EPS acceleration before their biggest price moves. Not just year-over-year growth, but acceleration: 15% growth one year, 22% the next, 35% the next. Each successive quarter shows faster growth than the last. This acceleration pattern drives positive earnings surprises (actual vs. estimated), which trigger analyst upgrades, which bring institutional buying, which drives price momentum. The sequence is reliably repeatable. O'Neil required recent quarters to show the highest EPS growth rates of the past several years — the business must be in its best form right now, not simply historically consistent.
Continue Learning
Go deeper into the Momentum school — frameworks, case studies, and decision systems.