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Astera Labs, Inc. (ALAB)
NASDAQ:ALAB
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Astera Labs, Inc.
(NASDAQ:ALAB)
Rating:71Outperform
Price Target:
$105.00
▲(13.70%Upside)
Positive Factors
AI and Technology Innovation
Astera Labs is well-positioned to capitalize on this significant technology inflection anticipated in the future, leveraging its comprehensive portfolio/leadership of AI compute connectivity/networking products.
Financial Performance
The company is estimated to drive 50%+ revenue and 50%+ EPS CAGRs through 2026 and achieve ~40% operating margins by FY28 through strong revenue growth and operating efficiency.
Partnerships and Collaborations
Management is encouraged by the extension of its collaboration with NVDA to enable NVIDIA NVLink Fusion for hyperscalers looking to easily integrate custom XPUs with NVLink.
Negative Factors
Investor Sentiment
Despite recent selloff and current stock price being attractive, the stock remains highly polarizing.
Market Uncertainty
Investor sentiment for AI has worsened amid higher macro uncertainty and supply chain risks.
Astera Labs, Inc. (ALAB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.97B
Dividend YieldN/A
Average Volume (3M)4.10M
Price to Earnings (P/E)393.6
Beta (1Y)2.57
Revenue Growth200.19%
EPS GrowthN/A
CountryUS
Employees440
SectorGeneral
Sector StrengthN/A
IndustrySemiconductors
Share Statistics
EPS (TTM)0.33
Shares Outstanding164,916,810
10 Day Avg. Volume3,880,745
30 Day Avg. Volume4,099,858
Financial Highlights & Ratios
PEG Ratio3.14
Price to Book (P/B)14.22
Price to Sales (P/S)0.00
P/FCF Ratio138.36
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue10.74
Enterprise Value/Gross Profit40.04
Enterprise Value/Ebitda-44.82
Forecast
1Y Price Target
$100.00Price Target Upside8.28% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Astera Labs, Inc. Business Overview & Revenue Model
Company DescriptionAstera Labs, Inc. designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. Its Intelligent Connectivity Platform is comprised of a portfolio of data, network, and memory connectivity products, which are built on a unifying software-defined architecture that enables customers to deploy and operate high performance cloud and AI infrastructure at scale. The company was incorporated in 2017 and is based in Santa Clara, California.
How the Company Makes MoneyAstera Labs makes money through the sale of its semiconductor-based connectivity solutions to data center operators, cloud service providers, and hardware manufacturers. Key revenue streams include the licensing of proprietary technology, direct product sales, and partnerships with major technology companies that integrate Astera Labs' solutions into their own products. The company's earnings are significantly influenced by its ability to deliver high-performance and reliable connectivity solutions that cater to the growing demand for efficient data transfer and processing in modern computing infrastructures.
Astera Labs, Inc. Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 29.41%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
Astera Labs reported strong revenue growth and product expansion, with positive guidance for future quarters. However, geopolitical issues and macroeconomic uncertainties pose potential challenges. The highlights outweigh the lowlights, indicating a positive sentiment overall.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Astera Labs reported Q1 2025 revenue of $159.4 million, up 13% from the prior quarter and 144% higher than Q1 2024.
Expansion of Product Lines
The company expanded its PCIe 6 connectivity portfolio to include gearboxes and optical connectivity technology, enhancing their Aries and Scorpio product families.
Board of Directors Expansion
Appointment of Dr. Craig Barratt to the Board of Directors, bringing significant experience to support the company's strategic goals.
Positive Financial Outlook
Astera Labs provided Q2 guidance with expected revenue growth of 7% to 10% and non-GAAP gross margins of approximately 74%.
Negative Updates
Impact of China Trade Restrictions
The company experienced a modest impact on revenue due to restrictions on shipments of retimers to China, affecting demand for third-party merchant GPU systems.
Macroeconomic Uncertainties
Concerns over tariffs and changing export restrictions, which could impact demand across the AI and cloud infrastructure markets.
Company Guidance
In the Astera Labs Q1 2025 earnings call, the company exceeded its guidance with quarterly revenues of $159.4 million, marking a 13% increase from the previous quarter and a 144% increase year-over-year. Non-GAAP gross margins were at 74.9%, and non-GAAP operating margin was 33.7%. The company anticipates Q2 revenues between $170 million and $175 million. They expect non-GAAP gross margins to remain around 74%, with non-GAAP operating expenses estimated between $73 million and $75 million. Astera Labs remains optimistic about long-term growth, driven by increasing contributions from its Scorpio product line, which is projected to comprise at least 10% of total revenue for 2025. The company is also focusing on expanding its PCIe 6 connectivity portfolio and anticipates significant growth opportunities with the adoption of the UALink protocol.Astera Labs, Inc. Financial Statement Overview
Summary
Astera Labs shows impressive revenue growth and a strong balance sheet with low leverage. However, profitability challenges remain, given the negative profit margins and return on equity. Positive free cash flow indicates potential for improved financial health.Income Statement
Astera Labs has shown a strong revenue growth of 242% from 2023 to 2024. Despite the impressive revenue growth, the company is still not profitable with negative net and EBIT margins, indicating ongoing operational challenges.65
Positive
Balance Sheet
The balance sheet is robust with a high equity ratio of 91.5% and low debt, evidenced by a debt-to-equity ratio of 0.001. However, the negative ROE of -8.65% highlights inefficiencies in generating profits from shareholders' equity.70
Positive
Cash Flow
Astera Labs has improved its cash flow situation significantly, with free cash flow turning positive in 2024. The operating cash flow to net income ratio is strong at -1.64, indicating effective cash management despite net losses.75
Positive
| Breakdown | |||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|
| Income Statement | Total Revenue | ||
| 490.47M | 396.29M | 115.79M | 79.87M | Gross Profit |
| 371.59M | 302.70M | 79.83M | 58.68M | EBIT |
| -21.81M | -116.07M | -29.50M | -60.19M | EBITDA |
| -18.15M | -112.91M | -27.72M | -59.39M | Net Income Common Stockholders |
| 41.39M | -83.42M | -26.26M | -58.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||
| 149.31M | 914.30M | 149.31M | 163.14M | Total Assets |
| 196.29M | 1.05B | 196.29M | 211.73M | Total Debt |
| 2.93M | 1.29M | 2.93M | 1.96M | Net Debt |
| -42.16M | -78.27M | -42.16M | -74.13M | Total Liabilities |
| 38.87M | 89.71M | 38.87M | 41.90M | Stockholders Equity |
| 157.43M | 964.80M | 157.43M | 169.84M |
| Cash Flow | Free Cash Flow | ||
| 108.17M | 102.43M | -15.48M | -39.77M | Operating Cash Flow |
| 143.53M | 136.68M | -12.72M | -35.90M | Investing Cash Flow |
| -757.26M | -757.57M | -17.77M | -90.59M | Financing Cash Flow |
| 4.65M | 655.84M | -502.00K | 151.67M |
Astera Labs, Inc. Technical Analysis
Positive
92.35
Price Trends
74.51
Positive
80.87
Positive
82.11
Positive
Market Momentum
4.86
Positive
59.68
Neutral
30.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALAB, the sentiment is Positive. The current price of 92.35 is above the 20-day moving average (MA) of 92.28, above the 50-day MA of 74.51, and above the 200-day MA of 82.11, indicating a bullish trend. The MACD of 4.86 indicates Positive momentum. The RSI at 59.68 is Neutral, neither overbought nor oversold. The STOCH value of 30.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALAB.
Astera Labs, Inc. Risk Analysis
Astera Labs, Inc. disclosed 65 risk factors in its most recent earnings report. Astera Labs, Inc. reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Astera Labs, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $10.75B | 27.96 | 6.70% | 3.91% | -12.90% | -51.90% | |
71 Outperform | $14.97B | 393.65 | 4.47% | ― | 200.19% | ― | |
69 Neutral | $9.30B | 138.48 | -7.70% | ― | 32.63% | -233.25% | |
66 Neutral | $4.12B | ― | -14.77% | ― | 2.16% | -55.38% | |
65 Neutral | $20.97B | 34.80 | 7.85% | ― | -18.28% | -70.98% | |
60 Neutral | $4.88B | ― | -12.78% | ― | 65.85% | 7.92% | |
58 Neutral | $4.97B | 19.81 | -16.90% | 5.27% | 13.61% | -24.47% |
* General Sector Average
Performance Comparison
ALAB
Astera Labs, Inc.
92.35
27.22
41.79%
MTSI
MACOM Technology Solutions Holdings
126.30
23.67
23.06%
ON
ON Semiconductor
52.38
-21.60
-29.20%
SLAB
Silicon Laboratories
134.98
17.73
15.12%
SWKS
Skyworks Solutions
73.17
-19.73
-21.24%
SITM
SiTime Corporation
213.03
89.12
71.92%
Astera Labs, Inc. Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Astera Labs Expands Board with New Appointment
Positive
Mar 3, 2025
On March 2, 2025, Astera Labs, Inc. announced the appointment of Dr. Craig Barratt to its Board of Directors, expanding the board from seven to eight members. Dr. Barratt, an independent director with extensive experience in the technology sector, is expected to provide strategic insight and guidance as Astera Labs continues to expand its leadership in AI and cloud infrastructure connectivity solutions. His appointment is seen as a move to strengthen the company’s industry position and support its growth and innovation efforts.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.