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Astera Labs, Inc. (ALAB)
NASDAQ:ALAB
US Market

Astera Labs, Inc. (ALAB) AI Stock Analysis

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Astera Labs, Inc.

(NASDAQ:ALAB)

Rating:69Neutral
Price Target:
$100.00
▲(9.34%Upside)
Astera Labs' strong revenue growth and strategic product expansions are significant factors supporting its stock score. While financial performance shows promise with improved cash flow, the stock's high valuation is a concern. Positive earnings call sentiment and recent governance improvements further boost the outlook, despite external risks from geopolitical and macroeconomic challenges.
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)

Astera Labs, Inc. Business Overview & Revenue Model

Company DescriptionAstera Labs, Inc. (ALAB) is a company that operates in the semiconductor industry, focusing on developing connectivity solutions for data-centric systems. It is known for providing intelligent system-aware interconnects that facilitate high-speed data transfer and connectivity in data centers and cloud computing environments. The company's core products include semiconductor-based solutions that enhance the performance and reliability of servers, storage systems, and networking equipment.
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: 28.17%|
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 is experiencing rapid revenue growth and maintains a solid balance sheet with low leverage. However, profitability remains a concern with negative profit margins and return on equity. The positive shift in free cash flow is a favorable indicator, suggesting potential for improved financial health.
Income Statement
65
Positive
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.
Balance Sheet
70
Positive
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.
Cash Flow
75
Positive
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022
Income StatementTotal Revenue
490.47M396.29M115.79M79.87M
Gross Profit
371.59M302.70M79.83M58.68M
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 SheetCash, Cash Equivalents and Short-Term Investments
924.73M914.30M149.31M163.14M
Total Assets
1.12B1.05B196.29M211.73M
Total Debt
0.001.29M2.93M1.96M
Net Debt
-86.43M-78.27M-42.16M-74.13M
Total Liabilities
80.13M89.71M38.87M41.90M
Stockholders Equity
1.04B964.80M157.43M169.84M
Cash FlowFree Cash Flow
108.17M102.43M-15.48M-39.77M
Operating Cash Flow
143.53M136.68M-12.72M-35.90M
Investing Cash Flow
-757.26M-757.57M-17.77M-90.59M
Financing Cash Flow
4.65M655.84M-502.00K151.67M

Astera Labs, Inc. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price91.46
Price Trends
50DMA
75.83
Positive
100DMA
80.13
Positive
200DMA
82.63
Positive
Market Momentum
MACD
4.33
Positive
RSI
62.16
Neutral
STOCH
45.92
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 91.46 is below the 20-day moving average (MA) of 93.18, above the 50-day MA of 75.83, and above the 200-day MA of 82.63, indicating a bullish trend. The MACD of 4.33 indicates Positive momentum. The RSI at 62.16 is Neutral, neither overbought nor oversold. The STOCH value of 45.92 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 (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$11.25B29.276.70%3.74%-12.90%-51.90%
69
Neutral
$9.54B138.48-7.70%32.63%-233.25%
69
Neutral
$15.08B389.864.47%200.19%
66
Neutral
$4.53B-14.77%2.16%-55.38%
ONON
65
Neutral
$22.48B37.327.85%-18.28%-70.98%
60
Neutral
$5.11B-12.78%65.85%7.92%
57
Neutral
$4.90B18.92-17.01%7.26%13.61%-24.47%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALAB
Astera Labs, Inc.
94.54
29.97
46.41%
MTSI
MACOM Technology Solutions Holdings
131.30
26.04
24.74%
ON
ON Semiconductor
51.78
-24.44
-32.07%
SLAB
Silicon Laboratories
136.42
14.60
11.98%
SWKS
Skyworks Solutions
72.82
-26.28
-26.52%
SITM
SiTime Corporation
215.60
86.32
66.77%

Astera Labs, Inc. Corporate Events

Executive/Board ChangesShareholder Meetings
Astera Labs Holds 2025 Annual Stockholders Meeting
Positive
Jun 10, 2025

Astera Labs, Inc. conducted its 2025 Annual Stockholders Meeting on June 5, 2025, where 144,451,882 shares were voted. During the meeting, stockholders elected three Class I directors to the board and ratified PricewaterhouseCoopers LLP as the company’s independent auditor for the fiscal year ending December 31, 2025. These decisions are expected to influence the company’s governance and financial oversight positively.

The most recent analyst rating on (ALAB) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Astera Labs, Inc. stock, see the ALAB Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.