TRUISM
7 months ago
ASTERA LABS STOCK EARNS WALL STREET ANALYST PRAISE. HERE'S WHY.
Josh Lipton and Julie Hyman-Mon, Apr 15, 2024, 3:51 PM EDT
LINK
Astera Labs (ALAB) has been receiving bullish coverage from Wall Street analysts since its initial public offering (IPO) on March 20, 2024. The semiconductor company went public at $36 per share and has been dubbed the best-performing IPO over $500 million so far this year.
Yahoo Finance's Julie Hyman and Josh Lipton break down the details.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination.
This post was written by Angel Smith
Video Transcript
JULIE HYMAN: Let's turn now to some calls of the day. We start with astera. Labs now this is facing a fresh batch of Wall Street coverage after going public in mid-Marh. And a majority of the brokers that initiated coverage have struck a bullish stance on the stock. But the shares are down 1.5%. But let's put this in context here. This is a company that came public March 20th, a day before Reddit. We also got a lot of Reddit calls today. $36 a share, it was up 72% in that first day of trading. And it's continuing to move higher. It is the best performing IPO over $500 million.
So far, this year it is in the semiconductor connectivity business and investors like that business right now.
JOSH LIPTON: Yeah. I mean, investors have been just so hungry to find ways to play AI. And they decided this is one of them. Analysts seem to like it, Julie. I mean, we eight buys one hold, no sell. Analysts at Needham saying valuation looking pricey. But the company is among, they say the fastest growing in the semiconductor industry. They talk about industry leading margins. They expect estimates to go up from here, specifically from higher AI server shipments. Their target 85.
JULIE HYMAN: Yeah. I thought also the one equal weight or hold equivalent rating is from Joseph Moore over at Morgan Stanley, who is definitely a veteran experienced chip analyst. He says it's the highest growth company within his coverage. But it's got a high valuation to match that high growth. He said though that the stock will be a, quote, "core small cap holding."
JOSH LIPTON: There you go.
JULIE HYMAN: Yeah.
TRUISM ENDORSED
TRUISM
8 months ago
NORTHLAND INITIATES ASTERA LABS STOCK WITH OUTPERFORM, CITES MARKET POSITION
Editor Ismeta Mujdragic Stock Markets-Published Mar 25, 2024 07:26AM ET
INVESTING.COM LINK
On Monday, Astera Labs (NASDAQ:ALAB) received a new Outperform rating from Northland, accompanied by a price target set at $85.00.
The initiation of coverage is based on Astera Labs' innovative approach to addressing the increasing demands of compute performance, which is being driven by advancements in artificial intelligence (AI).
Astera Labs has developed a software-defined integrated circuit (IC) architecture, which is designed to overcome the limitations of traditional connectivity solutions. This technology is particularly significant as AI applications continue to push the boundaries of what is required from processing, memory, and bandwidth. The company's approach aims to meet these growing needs with a scalable and adaptable solution.
Additionally, Astera Labs offers a software suite named COSMOS, which is utilized by major cloud service providers for the management of their server fleets. COSMOS enables users to configure, manage, monitor, and optimize Astera Labs' products, a feature that enhances the appeal of the company's offerings.
The software's capabilities contribute to making Astera Labs' products "sticky," suggesting that once customers integrate these solutions into their systems, they are likely to continue using them due to the high switching costs and the value derived from the products.
The new price target of $85.00 reflects confidence in the company's market position and its growth potential. This valuation is indicative of the firm's expectations for Astera Labs' performance in the market.
Astera Labs' entry into the market with its advanced solutions positions the company as a key player in the technology sector, catering to the burgeoning needs of AI-driven compute performance. The Outperform rating and the price target serve as indicators of the company's prospects in addressing the critical demands of the industry.
InvestingPro Insights
Following the new Outperform rating and price target for Astera Labs (NASDAQ:ALAB), InvestingPro data provides additional context for investors considering the company's financial health and market performance. Astera Labs boasts a market capitalization of $10.67 billion, reflecting significant investor confidence in its market position and growth potential. Despite this, the company's adjusted P/E ratio for the last twelve months as of Q4 2023 stands at a steep -406.55, highlighting its current lack of profitability.
The company's revenue growth is robust, with a 44.97% increase over the last twelve months as of Q4 2023, indicating a strong expansion in sales. This growth accompanies a high gross profit margin of 68.94%, suggesting that Astera Labs is efficient in its cost management relative to its revenue. However, it's important to note that the company's operating income margin is negative at -25.47%, which may be a point of concern for potential investors.
InvestingPro Tips provide additional insights into the
Company's recent market performance. Astera Labs has seen a strong return over the last month, with a price total return of 12.85%. Moreover, the company's liquid assets exceed its short-term obligations, which could provide some financial stability in the near term. However, Astera Labs does not pay a dividend to shareholders, which may influence the investment decisions of those seeking regular income from their investments.
TRUISM
8 months ago
ASTERA LABS STOCK: AFTER STELLAR IPO, ALAB RIDES AI WAVE
By: Diya Poddar on Mar 21, 2024
LINK
* Astera Lab entered into the stock market with a 72% surge in its share price on its first day of trading.
* The IPO of Astera Labs was met with robust demand, resulting in the successful raising of $700 million.
* Astera Labs' IPO shines with top clients like Nvidia, AMD, Intel, and Amazon.
Astera Labs, a semiconductor connectivity solutions provider, made a stellar entrance into the stock market with a 72% surge in its share price on its first day of trading.
Astera Labs IPO scores big
The IPO of Astera Labs was met with robust demand, resulting in the successful raising of $700 million.
This substantial investment reflects investors’ keen interest in AI-related technologies, particularly in the realm of semiconductor connectivity solutions where Astera Labs specializes.
Why is Astera Labs popular?
One of the key highlights of Astera Labs’ IPO is its client base, which includes major players in the data center industry and tech giants such as Nvidia, AMD, Intel, and Amazon.
This impressive roster of clients not only validates the company’s prominence but also positions it as a pivotal player in the AI infrastructure ecosystem.
Amazon has a big stake in Astera Labs
A significant development in Astera Labs’ IPO journey is the strategic investment by Amazon, a tech behemoth known for its forward-looking investments.
Amazon’s substantial stake in Astera Labs underscores the company’s potential in addressing critical challenges in AI infrastructure, further bolstering investor confidence in Astera’s future prospects.
The warrant agreements between Astera Labs and Amazon serve as a testament to the confidence the tech giant has in Astera’s ability to deliver value in the AI-driven marketplace.
This strategic partnership is poised to drive innovation and accelerate the adoption of Astera’s solutions in the rapidly evolving tech landscape
TRUISM
8 months ago
Astera Labs’ IPO pops 54%, showing that investor demand for tech with an AI twist is high
Rebecca Szkutak and Alex Wilhelm-Wed, March 20, 2024, 1:38 PM EDT
LINK
Astera Labs started its life as a public company trading at $52.56 per share, up 46% when the bell rang. The company priced its IPO last night at $36 per share, above its raised price range. Astera’s debut marks the first material technology offering this year that TechCrunch is tracking. Reddit, the well-known social forum and AI data provider, is expected to price after the close of trading today and begin its own public saga tomorrow.
Astera Labs makes connectivity hardware for cloud computing data centers. Because AI requires massive amounts of data moving into, out of and around data centers, Astera has seen recent revenues bloom. After generating $79.9 million in 2022, revenue swelled 45% in 2023 to $115.8 million.
Since trading began, Astera’s shares have continued to climb, reaching $55.73 as of the time of writing, for a gain of around 54%. While the company’s strong early trading will certainly engender critiques that it was mispriced, and that the company left money on the table, its bull-rush into public life may help other private-market tech companies find the courage to list their own shares after a long period of limited IPO activity.
Astera Labs' IPO price valued it at around $5.5 billion, a figure that swells to around $8.9 billion at its current trading price. Fully diluted valuation figures are higher, but what matters for the company is that it bested its final private price in its IPO pricing, and then trounced the latter figure immediately after.
A quiet winner
While the song and dance surrounding Astera Labs' public offering has been noticeably quieter than that surrounding Reddit's IPO, there’s reason to believe that it is more a test of the market’s demand for AI shares than Reddit’s own debut; while Reddit’s AI-based data business is certainly a growing portion of its operations, it remains a single-digit percentage of its anticipated 2023 per TechCrunch analysis.
In contrast, the AI-led data center buildout that is benefiting Astera Labs makes up what the market may consider a larger portion of its current size, and future growth. The fact that the company’s growth rate accelerated as much as it did in the fourth quarter of 2023 and that it managed to reach swing from a loss to GAAP profitability that quarter underscores the view that it is a company on the move thanks to AI demand. This even though it sits far from the more headline-friendly foundation model work that OpenAI and its rivals are undertaking.
“They're not an AI company. But they're certainly I think, benefiting from that trend,” said Nick Einhorn, vice president of research at Renaissance Capital, a company that tracks the IPO market and offers public-offering focused ETFs. “And I think when you look at the revenue growth, it's really the most recent quarter is, I think, the most compelling argument for them.”
Astera’s debut will also likely prove a better gauge for how venture-backed IPOs will perform this year. While Reddit was also venture-backed, it has a bit of unique financial past that includes being acquired and spun out. Astera Lab on the other hand, founded in 2017, has raised $206 million in venture capital, and was last valued at $3.1 billion which makes it a better comp for the other names people are keeping an eye on including Databricks, Stripe and Plaid.
Reddit’s up next
The final closing price for Astera shares could provide a positive signal for AI hardware companies, but may also warm the IPO waters for Reddit’s own listing. Had Astera stumbled out of the gate, Reddit might have found itself wounded before it even began to trade.
Instead, Astera is putting up 2021-era first-day trading results -- perhaps Reddit can follow?
The strong performance of Astera in its first hours as a public company could also ameliorate some investor activity that is holding back, or even preventing some public offerings altogether. As TechCrunch reported earlier this week, some late-stage startups may not be able to go public below their last primary valuation — even if there founders are ok with hitting the public markets at a lower price — due to table stakes VC deal terms including dilution rights which would give investors the ability to block the deal.
If VCs know that the startup could pop on the public market like Astera Labs, maybe they will think about the timeline differently.
TRUISM
8 months ago
ASTERA LABS PRICES 19.8M SHARE IPO AT $36/SH
BY Vlad Schepkov Stock Markets
Published Mar 20, 2024 05:49AM ET
LINK
© Reuters. Astera Labs (ALAB) Prices 19.8M Share IPO at $36/sh
Astera Labs, Inc. (ALAB) today announced the pricing of its initial public offering of 19,800,000 shares of its common stock at a price to the public of $36.00 per share. The offering consists of 16,788,903 shares of common stock offered by Astera Labs and 3,011,097 shares of common stock to be sold by certain of Astera Labs’ existing stockholders.
In addition, the underwriters will have a 30-day option to purchase up to an additional 2,970,000 shares of common stock from Astera Labs at the initial public offering price, less underwriting discounts and commissions. The gross proceeds to Astera Labs from the offering, before deducting underwriting discounts and commissions and estimated offering expenses payable by Astera Labs, are expected to be approximately $604.4 million. Astera Labs will not receive any proceeds from the sale of shares by the selling stockholders. The shares are expected to begin trading on the Nasdaq Global Select Market under the ticker symbol “ALAB” on March 20, 2024. The offering is expected to close on March 22, 2024, subject to customary closing conditions.
Morgan Stanley and J.P. Morgan are acting as joint book runners for the offering. Barclays, Deutsche Bank Securities, Evercore ISI and Jefferies are additionally acting as book runners, and Needham & Company, Stifel, Craig-Hallum Capital Group, Roth Capital Partners, Loop Capital Markets and Siebert Williams Shank are acting as co-managers.
The proposed offering will be made only by means of a prospectus. Copies of the final prospectus, when available, may be obtained from: Morgan Stanley & Co (NYSE:MS). LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014 and J.P. Morgan Securities LLC, Attn: Broadridge Financial Solutions (NYSE:BR), 1155 Long Island Avenue, Edgewood, New York 11717, by toll free telephone at 1-866-803-9204 or by email at prospectus-eq_fi@jpmorganchase.com.
A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission, and became effective on March 19, 2024. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
TRUISM
8 months ago
ASTERA LABS SEEKS TO RAISE AROUND $713 MIN in IPO at $5.5 BIN VALUATION
March 19, 202410:31 PM EDT Updated 11 hours ago
REUTERS LINK
March 19 (Reuters) - Chip firm Astera Labs (IPO-ASTB.O), opens new tab on Tuesday set the pricing of its initial public offering (IPO) of 19.8 million shares at $36 apiece, aiming to raise around $712.8 million.
The company priced its IPO above its previous target range of $32 to $34 apiece, giving it a valuation of about $5.5 billion based on the outstanding shares listed in its filings with the U.S. Securities and Exchange Commission.
The company's shares are expected to begin trading on Nasdaq Global Select Market under the the ticker symbol "ALAB" on March 20, Astera Labs said.
The listing comes at a time when growing popularity of AI and its influence across various sectors has been driving a rally in technology firms, propelling stocks of companies such as Nvidia (NVDA.O), opens new tab to record highs.
The gross proceeds are expected to be around $604.4 million, Astera Labs said in a statement.
The California-based company offers vital data center components to its customers including large cloud service providers. It was valued at $3 billion in its last funding round in 2022.
Morgan Stanley and J.P. Morgan are the joint book runners for the offering.
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