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Astera Labs, Inc. (ALAB)
:ALAB
US Market
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Astera Labs, Inc. (ALAB) AI Stock Analysis

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ALAB

Astera Labs, Inc.

(NASDAQ:ALAB)

Rating:64Neutral
Price Target:
$130.00
▲(6.36%Upside)
Astera Labs benefits from strong financial growth and positive corporate governance developments. However, the stock's high valuation and overbought technical indicators present significant risks. The positive earnings call outlook is counterbalanced by external geopolitical and macroeconomic pressures.
Positive Factors
AI market prospects
AI spend is expected to continue, boosting the company's prospects.
Product development
Astera Labs is a rapidly growing share gainer in the connectivity chip market.
Revenue growth
The scale-up opportunity for Trainium 3 is estimated to bring significant revenue increases.
Negative Factors
Customer concentration
There are concerns about increased customer concentration from more AMZN impacting the company's valuation multiple.
Investor sentiment
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 leading semiconductor company that specializes in developing purpose-built connectivity solutions for data-centric systems. The company operates within the technology sector, focusing on enabling seamless data flow between processors, accelerators, and memory. Their core products include purpose-built chips, boards, and software that optimize connectivity in data centers, artificial intelligence, and machine learning applications.
How the Company Makes MoneyAstera Labs generates revenue through the sale of its semiconductor products and solutions, which are specifically designed to enhance data connectivity in complex computing environments. The company's key revenue streams include the sale of high-speed connectivity chips and modules that facilitate efficient data transfer and communication within data centers and cloud infrastructures. Additionally, Astera Labs may engage in strategic partnerships with major technology companies to integrate its solutions into larger systems, further driving sales and market penetration. The company's earnings are significantly influenced by the growing demand for advanced data processing and storage solutions in sectors such as AI, machine learning, and cloud computing.

Astera Labs, Inc. Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 71.29%|
Next Earnings Date:Aug 05, 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 has demonstrated impressive revenue growth and maintains a strong balance sheet with low leverage. However, ongoing losses and negative profit margins are major concerns, despite the positive turn in free cash flow.
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.
BreakdownDec 2024Dec 2023Dec 2022
Income Statement
Total Revenue396.29M115.79M79.87M
Gross Profit302.70M79.83M58.68M
EBITDA-112.91M-27.72M-59.39M
Net Income-83.42M-26.26M-58.34M
Balance Sheet
Total Assets1.05B196.29M211.73M
Cash, Cash Equivalents and Short-Term Investments914.30M149.31M163.14M
Total Debt1.29M2.93M1.96M
Total Liabilities89.71M38.87M41.90M
Stockholders Equity964.80M157.43M169.84M
Cash Flow
Free Cash Flow102.43M-15.48M-39.77M
Operating Cash Flow136.68M-12.72M-35.90M
Investing Cash Flow-757.57M-17.77M-90.59M
Financing Cash Flow655.84M-502.00K151.67M

Astera Labs, Inc. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price122.23
Price Trends
50DMA
95.81
Positive
100DMA
80.67
Positive
200DMA
90.36
Positive
Market Momentum
MACD
7.70
Negative
RSI
70.41
Negative
STOCH
88.36
Negative
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 122.23 is above the 20-day moving average (MA) of 100.05, above the 50-day MA of 95.81, and above the 200-day MA of 90.36, indicating a bullish trend. The MACD of 7.70 indicates Negative momentum. The RSI at 70.41 is Negative, neither overbought nor oversold. The STOCH value of 88.36 is Negative, 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 (56)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$23.17B39.487.85%-18.28%-70.98%
70
Outperform
$10.21B138.48-7.70%32.63%-233.25%
70
Outperform
$10.74B27.946.70%3.91%-12.90%-51.90%
64
Neutral
$20.16B521.014.47%200.19%
64
Neutral
$4.38B-14.77%2.16%-55.38%
56
Neutral
$6.23B21.98-28.61%4.90%10.73%-32.66%
52
Neutral
$4.93B-12.78%65.85%7.92%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALAB
Astera Labs, Inc.
122.23
76.22
165.66%
MTSI
MACOM Technology Solutions Holdings
137.67
38.13
38.31%
ON
ON Semiconductor
56.92
-21.35
-27.28%
SLAB
Silicon Laboratories
134.50
14.68
12.25%
SWKS
Skyworks Solutions
71.53
-41.84
-36.91%
SITM
SiTime Corporation
190.16
45.98
31.89%

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.Date of analysis: Jul 22, 2025