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

Astera Labs, Inc. (ALAB) AI Stock Analysis

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AL

Astera Labs, Inc.

(NASDAQ:ALAB)

Rating:71Outperform
Price Target:
$105.00
▲(13.70%Upside)
Astera Labs' strong revenue growth and positive earnings call sentiment significantly boost its stock score. The upward technical momentum supports this positive outlook. However, concerns over profitability and a high P/E ratio weigh down the overall score.
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. 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
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
149.31M914.30M149.31M163.14M
Total Assets
196.29M1.05B196.29M211.73M
Total Debt
2.93M1.29M2.93M1.96M
Net Debt
-42.16M-78.27M-42.16M-74.13M
Total Liabilities
38.87M89.71M38.87M41.90M
Stockholders Equity
157.43M964.80M157.43M169.84M
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 Price92.35
Price Trends
50DMA
74.51
Positive
100DMA
80.87
Positive
200DMA
82.11
Positive
Market Momentum
MACD
4.86
Positive
RSI
59.68
Neutral
STOCH
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
$10.75B27.966.70%3.91%-12.90%-51.90%
71
Outperform
$14.97B393.654.47%200.19%
69
Neutral
$9.30B138.48-7.70%32.63%-233.25%
66
Neutral
$4.12B-14.77%2.16%-55.38%
ONON
65
Neutral
$20.97B34.807.85%-18.28%-70.98%
60
Neutral
$4.88B-12.78%65.85%7.92%
58
Neutral
$4.97B19.81-16.90%5.27%13.61%-24.47%
* General Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.