Switch Inc. (SWCH), based in Las Vegas, designs and constructs data centers, explains Leo Fasciocco, a specialist in technical breakouts and the editor of Ticker Tape Digest.
With annual revenues of $462 million, SWCH is a developer and operator of the SUPERNAP, data center facilities, and provides colocation, telecommunications, cloud services, and content ecosystems.
The company's technologies include 100% hot aisle containment rows, exterior wall penetrating multi-mode HVAC units and hot and cold containment segregation structures. It also includes redundant data center roofing systems, multi-system power containers, and data center infrastructure management systems.
We had recommended accumulation of the stock in anticipation of a breakout. SWCH's stock moved higher on Friday and cleared its breakpoint late in the day. The close on a high is very bullish for a positive opening on Monday.
SWCH's daily chart shows the stock forming a classic cup-and-handle basing pattern. We had recommended accumulation of the stock in anticipation of a breakout. The stock moved to the top of the base and now breaks out with good volume. WHC's momentum indicator is bullish.
This year, analysts predict a big 91% surge in net to 21 cents a share from the 11 cents the prior year. The stock sells with a price-earnings ratio of 81. That is high but okay given the earnings growth rate.
Net for the first quarter should leap 150% to 5 cents a share from the 2 cents the prior year. Net for the second quarter should be up 50% to 6 cents a share from the 4 cents the previous year.
Looking out to 2021, the Street predicts a 20% increase in net to 25 cents a share from the anticipated 21 cents this year. Four analysts track stock.
SWCH's 12-month performance chart shows the stock up 70% versus a 5% decline for the stock market.
The stock came public at $19.16 in 2017. The stock fell back to $6.39 by late 2018.
However, since then SWCH has rallied strongly. It is within range to make a new all-time high. That would be bullish. It needs to top $19.73. A follow-through move to the upside would be ideal. We are targeting SWCH for a move to $234. A protective stop can be placed near $16 after a breakout.
