The stock market currently presents a mixed picture: the S&P 500’s long-term trend is negative, but its short-term trend is positive. In such an environment, many growth investors use a disciplined screening approach to find stocks with strong earnings momentum, positive price action, and a favorable entry point. One popular method combines CANSLIM and Mark Minervini-style criteria, which emphasize accelerating earnings and sales, positive analyst revisions, and a technical setup that suggests a breakout is near. By running our High Growth Momentum Breakout Setups screen, we look for stocks that pass three key filters: a High Growth Momentum (HGM) Rating above 4, a Technical Analysis (TA) Rating above 7, and a Setup Rating above 7. This triple filter helps narrow the field to companies with both fundamental strength and a chart pattern ready to move higher. Today, we take a closer look at ASTERA LABS INC (NASDAQ:ALAB), which emerges as a strong candidate from that screen.

Why ALAB Scores High on the High Growth Momentum Rating

The High Growth Momentum Rating is a composite score that evaluates a stock on short-term earnings and sales momentum, acceleration, profit margin trends, earnings surprises, and analyst estimate revisions. ALAB earns a strong rating of 7 out of 10 on this metric. Let’s break down the numbers driving that score:

• Earnings Per Share (TTM): $2.12
• EPS Growth 1Y (TTM): +100.0% – a remarkable doubling of trailing earnings.
• EPS Growth Q2Q (last reported quarter vs. same quarter prior year): +84.8%
• EPS Growth Q2Q (Q-1): +56.8%
• EPS Growth Q2Q (Q-2): +113.0%
• EPS Growth Q2Q (Q-3): +238.5%

The pattern above shows consistent year-over-year quarterly acceleration across multiple quarters, which is a key requirement for high growth momentum strategies. Additionally, ALAB has beaten EPS estimates in all of the last 4 quarters, with an average beat of 19.7%, and beaten revenue estimates in all 4 quarters with an average beat of 7.1%. This consistent surprise ability is a hallmark of CANSLIM-type stocks.

• Revenue Growth 1Y (TTM): +104.2%
• Sales Growth Q2Q (last quarter): +93.4%
• Sales Growth Q2Q (Q-1): +91.8%
• Sales Growth Q2Q (Q-2): +103.9%
• Sales Growth Q2Q (Q-3): +149.7%

Sales growth has also remained above 90% for multiple quarters, with no signs of deceleration. Furthermore, the profit margin in the last quarter stands at 26.0%, up from 16.6% in the prior quarter, indicating expanding profitability. Finally, analysts have revised the next year EPS estimate higher by 22.0% in the last three months, while revenue estimates for next year increased by 15.2% – both strong confirmations of positive forward momentum.

Technical Strength: Perfect Score for a Reason

Earnings and sales growth alone aren’t enough. The stock must also show strong technical health. ALAB’s ChartMill Technical Rating is a perfect 10 out of 10. This rating measures the overall technical condition of the stock across long and short timeframes. Here is what the technical report highlights:

• Long-term trend: Positive
• Short-term trend: Positive
• Relative strength vs. all stocks: Outperforms 99% of all stocks
• Relative strength vs. Semiconductors & Semiconductor Equipment industry: Outperforms 94% of 116 stocks in the same industry
• 52-week high/low: Currently trading near the upper end of its 52-week range ($440.99 high) – and the S&P 500 is also near its own high, so the stock is moving in sync with the broader market leader.
• Moving averages: All key moving averages (SMA20, SMA50, SMA100, SMA200) are rising, and the price sits above them.

For a more detailed breakdown of these technical indicators, you can view the full technical analysis report for ALAB on ChartMill.

Setup Quality: A Decent Entry Point

A high technical rating tells us the trend is strong, but the Setup Rating tells us if the stock has formed a reasonable consolidation pattern where a stop-loss can be placed. ALAB receives a Setup Rating of 7 out of 10. According to the analysis:

• The stock shows reduced volatility while prices have been consolidating in the most recent period.
• There is a clear support zone below the current price, ranging from $386.41 to $391.73, formed by a combination of trend lines.
• There is very little resistance above current levels.

The report suggests an entry at $441.00 (a buy stop just above the 10-day high) with a stop-loss at $386.40 (just below the support zone). While the setup is not a perfect 10, it still provides a reasonable risk/reward profile for a high growth momentum stock. In a strategy that prioritizes strong earnings momentum and trending stocks, a good-but-not-perfect setup is often sufficient as long as the fundamentals remain strong.

See More High Growth Momentum Breakout Setups

If you are interested in finding more stocks that combine strong fundamentals with a promising technical setup, we invite you to explore the full screen. Click here to access the full list of High Growth Momentum Breakout Setups and run your own analysis.

Final Thoughts

Astera Labs stands out as a textbook example of a high growth momentum stock: accelerating earnings and revenue, consistent quarterly surprises, expanding margins, and positive analyst revisions. On the technical side, it is in a strong uptrend with a decent consolidation pattern that allows for disciplined risk management. While no trade is ever guaranteed, the combination of fundamental and technical evidence makes ALAB a name worth watching for growth-focused investors.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider your risk tolerance before making any trading decisions.

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