The search for high-growth stocks often involves a blend of technical and fundamental analysis, a method supported by legendary trader Mark Minervini. His system, known as the Specific Entry Point Analysis (SEPA), methodically finds stocks with strong potential by concentrating on firm price trends, improving fundamentals, and exact entry points. A central part is the Trend Template, a technical checklist that confirms a stock is in a firm, confirmed uptrend. For growth investors, this technical condition must be joined with solid and getting better business metrics. A filter joining Minervini's Trend Template with a High Growth Momentum (HGM) rating seeks to locate companies that are not only ahead of the market on price but are also supported by notable operational momentum.
Planet Labs PBC (NYSE:PL) appears as a notable candidate from such a filter. The Earth observation company, which provides daily global data and analytics, seems to match the strict requirements of both a momentum-based trading plan and a high-growth investment view.
A Textbook Trend Template Setup
For Minervini, a stock's technical condition is essential. The Trend Template's rules are made to sort for stocks in a clear "Stage 2" advance, where the path of least resistance is clearly higher. Planet Labs' chart now shows the signs of this firm phase.
- Moving Average Alignment: The stock's price is trading well above its important moving averages. Importantly, these averages are arranged positively, with the shorter-term 50-day SMA above both the 150-day and 200-day SMAs, and the 150-day SMA above the 200-day SMA. This order confirms a continued, multi-timeframe uptrend.
- Proximity to Highs: PL is trading within 5% of its 52-week high of $37.05, meeting the template's need to be within 25% of the high. At the same time, the current price is over 1,100% above its 52-week low, showing great recovery force and momentum. This pairing of being close to new highs while distant from lows is a standard feature of market-leading stocks.
- Superior Relative Strength: Possibly most notable is the stock's ChartMill Relative Strength (CRS) rating of 99.65. This means PL is doing better than almost all other stocks in the market over the past year. In Minervini's system, high relative strength is a vital sign of institutional demand and leadership, often coming before major breakouts.
This technical view is not random. The strict Trend Template requirements exist to find stocks where buyer commitment is strong, greatly raising the chance that the stock will continue its rise. For a growth investor, this offers a positive technical condition.
The High-Growth Fundamental Engine
A firm chart is only part of the story. Minervini's SEPA plan stresses that the largest stock market winners are nearly always backed by strong fundamental improvement. Planet Labs' recent financial results indicate it has this needed engine for continued growth.
The company's metrics show a business performing well:
- Earnings Momentum: The shift toward profitability is a main story. The company's EPS (TTM) has gotten better by 85.7% over the past year. More specifically, the last four straight quarters have all shown important year-over-year EPS growth, with the most recent quarter reporting a 100% gain. Also, the company has exceeded analyst EPS estimates in all of the last four quarters, with an average surprise of over 82%.
- Solid and Improving Revenue Growth: Top-line growth remains solid, with TTM revenue up 25.9%. Quarterly momentum is even more clear, with sales growth increasing from 9.6% three quarters ago to 41.1% in the most recent quarter. Analysts are noticing, having lifted their revenue estimates for the next year by over 13% in the last three months.
- Cash Flow Change: A vital signal of developing growth companies is the creation of free cash flow. Planet Labs' FCF per share has jumped 174.8% over the past year, moving clearly into positive area. This getting better cash creation gives the company more strategic options and lowers need for outside financing.
For a high-growth investor, these are not just figures; they are proof of successful execution, market acceptance, and growing operations. The "High Growth Momentum" rating of at least 4, which PL meets, is made to catch this exact picture of improving financial performance, making sure the technical breakout has a fundamental base.
Technical Health and Setup Assessment
Beyond the specific Trend Template requirements, a wider technical study of PL supports its force. According to ChartMill's own report, the stock receives a top-level Technical Rating of 10 out of 10, signaling outstanding technical health across both short and long-term timeframes. The long-term and short-term trends are both rated as positive, and the stock is a clear leader within its Professional Services industry.
The report also mentions a good Setup Rating of 6. While the stock has increased firmly and is trading near the high of its recent range, suggesting new entries might gain from waiting for a constructive pause, the study indicates lower volatility and consolidation in the most recent period. This can be a sign before the next move higher. The report finds clear support and resistance areas, giving a structure for possible entry and risk management. You can see the full, detailed technical study here: ChartMill Technical Report for PL.
A Meeting of Force
Planet Labs PBC presents a case where a notable growth story is being confirmed by the market's price action. The stock fits the disciplined technical filters of the Minervini Trend Template, confirming it is in a firm uptrend with superior relative strength. At the same time, its fundamental picture shows the improvement in earnings, revenue, and cash flow that high-growth investors look for and that Minervini points to as the driver for "super-performance."
This pairing seeks to find chances where strong business momentum and strong price momentum meet, possibly offering a favorable balance of risk and reward.
Interested in finding other stocks that fit this high-growth, momentum picture? You can examine the filter that found PL and find more possible candidates by visiting the High Growth Momentum + Trend Template screener on ChartMill.
Disclaimer: This article is for informational and educational purposes only. It is not a recommendation to buy or sell any security. The analysis is based on provided data and specific screening methods. All investing and trading involves risk, including the potential loss of principal. Always conduct your own complete research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.