# ALAB: Astera Labs, Inc.

**Verdict: GROWTH** · Confidence 94% · Value score 50% · Growth score 95%

Value checklist: 3/6 passed (score 50%). Growth checklist: 10/11 passed (score 95%). A profile needs a score of at least 60%. The stock fits the growth profile and not the value profile. 1 of 18 checks couldn't be evaluated and were left out.

## Company

|  |  |
|---|---|
| Sector | Technology |
| Industry | Semiconductors |
| Country | United States |
| Market cap | $49.6B |
| Price | $285.82 USD |
| Annual dividend | None |
| Employees | 756 |

Astera Labs, Inc. designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure in Taiwan and the United States. It offers an intelligent connectivity platform, comprised of semiconductor-based, high-speed, mixed-signal connectivity products that integrate a matrix of microcontrollers and sensors, and COSMOS. The company provides COSMOS software suite, a connectivity system management and optimization software that enables management and optimization of resources for large fleets at cloud-scale via link, fleet, and RAS management capabilities. In addition, it offers PCIe/CXL smart DSP retimers and cable modules; ethernet smart cable modules for cloud and AI infrastructure; CXL memory connectivity controllers; and smart fabric switches. The company serves hyperscalers and system original equipment manufacturers. Astera Labs, Inc. was incorporated in 2017 and is based in San Jose, California.

## Value Checklist

| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Price / Earnings Growth (PEG) | Below 1 | 2.40 | Fail | P/E / 58.7% analyst next-year EPS growth |
| Price / Earnings (P/E) | Below 15 | 140.80 | Fail |  |
| Price / Book (P/B) | Below 1 | 28.73 | Fail |  |
| Return on Equity (ROE) | Above 15% | 25.83% | **Pass** |  |
| Return on Assets (ROA) | Above 4% | 10.67% | **Pass** |  |
| Debt / Equity (D/E) | Below 1 | 0.03 | **Pass** |  |

## 10-Year EPS Test

| Step | Value |
|---|---|
| EPS 0.8 years ago | $1.22 |
| Current EPS | $2.03 |
| Lowest P/E in period | 38.63 |
| Current share price | $285.82 |
| Annual dividend per share | $0.00 |
| EPS growth rate | N/A |
| Projected EPS in 0.8 years | N/A |
| Projected trading price (lowest P/E x EPS) | N/A |
| Projected value (+ 0.8 yrs of dividends) | N/A |
| Annual compound return | N/A |
| Hurdle rate | 12.00% |
| Result | **N/A** |

_Skipped loss-making years (FY 2022, 2023, 2024). Only 0.8 years of usable EPS history; at least 2 are needed._

## Growth Checklist

| Ratio | Threshold | Actual | Result | Note |
|---|---|---|---|---|
| Gross Profit Margin | Above 40% | 75.13% | **Pass** |  |
| Operating Profit Margin | 10% to 25% | 22.74% | **Pass** |  |
| Net Profit Margin | Above 10% | 30.74% | **Pass** |  |
| Return on Equity (ROE) | Above 15% | 25.83% | **Pass** |  |
| Current Ratio | Above 2 | 10.05 | **Pass** | Very high; can mean idle cash or bloated receivables/inventory, not only strength. |
| Quick Ratio | Above 1.5 | 9.16 | **Pass** |  |
| Accounts Receivable Turnover | Above 7.3 | 13.97 | **Pass** |  |
| Inventory Turnover | Above 7.3 | 4.06 | Fail (sector-typical) | Low inventory turnover is normal for chipmakers (NVDA ~3.2, AMD ~2.3 in 2025, per AlphaQuery). |
| Healthy Working Capital (CA > CL) | Above $0 | $1.2B | **Pass** | Current assets $1.4B vs current liabilities $133.0M |
| Revenue Growth (annual CAGR) * | Above 10% | 120.14% | **Pass** |  |
| Expected EPS Growth (next year) * | Above 10% | 58.74% | **Pass** |  |

\* Extra growth signal on top of the core checklist.

## Qualitative Analysis: Value Factors

| Factor | Signal | Evidence |
|---|---|---|
| Small is Beautiful | Against | Large-cap company ($49.6B market cap). It is widely followed by analysts and big investors, so the market is less likely to overlook it. |
| Annuity Business | Neutral | Revenue has been steady, but there is no clear sign it comes from recurring contracts: revenue rose every year for the last 3 years. |
| Durable Competitive Advantage | Supports | Gross margin of 75.1% and net margin of 30.7% show pricing power that competitors haven't eroded, a sign of a moat. |
| Revenues & Commodity | Supports | Revenue from Semiconductors isn't tied to commodity prices, so earnings are more predictable. |
| Need for Capital | Supports | The business funds itself without heavy borrowing or spending: debt-to-equity is 0.03 (threshold: below 1); capital spending uses 12% of operating cash flow. |
| Insider Buying | Against | In the past two years insiders made 0 purchases ($0) and 108 sales ($1.4B). No insider buying, so there's no signal that management sees the stock as undervalued. |

## Qualitative Analysis: Growth Factors

| Factor | Signal | Evidence |
|---|---|---|
| Market Potential | Supports | It has a large, expanding market to grow into: it operates in fast-growing areas (semiconductor, software, cloud); revenue has grown 120.1% per year. |
| New Goods/Services & Customer Orientation | Supports | R&D spending has grown 60.3% per year alongside 120.1% annual revenue growth, showing that new products are turning into sales. |
| Research & Development | Supports | R&D is 35.7% of revenue, a heavy investment that keeps products competitive and in demand. |
| Profit Margins | Supports | Gross 75.1%, operating 22.7%, net 30.7%. High margins show customers are willing to pay for its products. |
| Market Share | Supports | Revenue growth of 120.1% per year suggests it is taking market share, and at $49.6B it still has room to expand. |

## Caveats

- Inventory Turnover fails the threshold (4.06), but low inventory turnover is normal for chipmakers (NVDA ~3.2, AMD ~2.3 in 2025, per AlphaQuery).
- EPS test: Skipped loss-making years (FY 2022, 2023, 2024). Only 0.8 years of usable EPS history; at least 2 are needed.
- Long-run EPS history comes from Yahoo Finance (about 4 years). Set SEC_USER_AGENT to use 10+ years of SEC filings, or enter the EPS test inputs yourself.

## Sources

- Yahoo Finance (yfinance): price, ratios, financial statements, insider transactions
- Data fetched: 2026-10-19T13:03:38+00:00

> ⚠️ For educational purposes only. This is not financial or investment advice.