It's Not Too Late to Jump on These Under-the-Radar Momentum Plays

Key Points

• Momentum investing seeks an entry point to an investment that times a stock's rally to capture gains and before the trajectory slows or reverses.
• ODD, NEO, and FIX could all present momentum opportunities for investors, though each of these stocks has made gains over a different timeframe.
• Sector-specific tailwinds and positive analyst sentiment may help to drive growth in each of these cases.

Those subscribing to a momentum investing strategy tend to believe that stocks experiencing price increases tend to rally, so long as both internal and external conditions don't change. Of course, no rally can continue forever, so investors may measure momentum across different timeframes. The key goal for a momentum investor is to identify a possible target and enter a position while there is still potential for upside.

Three stocks across multiple sectors may draw the attention of investors looking for a momentum play based on their share price improvement over short, medium, and long timeframes. These companies may be overlooked by investors more broadly because they are not necessarily the biggest names within their sectors or industries, but they are each supported by several positive analyst ratings.

Online-Focused Beauty Firm Beat Earnings Expectations, Continues to Grow

Oddity Tech Ltd. NASDAQ: ODD is a tech company that partners with the beauty and wellness industry to build digital-first brands along with an AI-based online consumer platform. Five out of eight analysts that have rated Oddity have given it a Buy signal.

Oddity shares trended upward throughout most of April, but they spiked in the month's final days after a highly successful first-quarter earnings report. It is up about 70% in the last month and 53% year-to-date (YTD). The company topped analyst expectations for earnings per share (EPS) by six cents, boosted revenue by 27% year-over-year (YOY), reported a strong gross margin of 74.9%, and raised forward guidance.

Often, investors will shy away from a company with a significant share price boost due to a positive earnings report, as these gains can be short-lived. However, Oddity presents numerous signs that these trends could continue. The firm is a leader in the shift toward online shopping in the beauty industry, which appears to be picking up pace.

Its IL MAKIAGE brand is a standout, and the company looks on target to achieve its goal of $1 billion in revenue by 2028. While Oddity is heavily exposed to the U.S. market, and the potential for tariffs that could impact demand and prices, it is rapidly expanding into other areas, particularly in Europe.

Despite Recent Downward Trend, NeoGenomics Builds Momentum With Raised Guidance and Strategic Acquisition

Cancer and cytogenetics testing service provider NeoGenomics Inc. NASDAQ: NEO has a Buy rating from five Wall Street analysts and a consensus price target more than 85% above current price levels. This may suggest that the company's recent reversal of a downward trend—it climbed by 22% from April 30 to mid-day on May 5 after falling from a one-year high achieved in January—has the potential to continue.

NeoGenomics' share price drop in late April is likely attributable to the firm's lackluster earnings report, in which losses per share were wider than analysts predicted and revenue missed expectations. Though volatility may be in store for this firm as its clients, which include academic institutions and researchers as well as oncologists and others in the medical field, wrestle with the impacts of canceled research funding, NeoGenomics could fill an important niche in the midst of shifting federal government policies.

The company may have anticipated that opportunity when it raised full-year 2025 guidance in the latest earnings report. Another driver of this optimism is likely NeoGenomics' recent completion of its purchase of Pathline, which should both broaden its geographical range in the northeastern United States and deepen its portfolio of molecular and hematology-oncology testing services.

Unanimous Buy Ratings, 19% Upside as Data Center Boom and Fuels Backlog Surge

Mechanical and electrical services provider Comfort Systems USA Inc. NYSE: FIX has a unanimous Buy rating from all five analysts reviewing the firm, plus 19% upside potential based on a consensus price target of $517.60. The company's shares have shot upwards in the last month, climbing by about 40%.

Comfort Systems has seen its backlog blossom in recent quarters thanks to the CHIPS Act and major spending pushes on data centers, a key focus of its operations. This shows no signs of slowing in the Trump administration, as the company's backlog grew by almost $1 billion from the end of 2024 to the conclusion of this year's first quarter.

With anticipated revenue growth for 2025 in the double digits, Comfort Systems could get a further boost if the administration's efforts to restore manufacturing operations to the United States are successful.