Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>Astera Labs reported solid 2Q’FY24. The company beat all key estimates, showed relatively strong demand and operating metrics.  </li>
<li>With the stock trading at 19x EV/2024E Revenue and 13x EV/2025E Revenue I see shares as fairly-valued and expect the stock to trade in-line with peers. PT to $39.00.</li>
<li>All remaining Astera Labs shares held by stockholders became eligible for sale as IPO lock-up expired following public release of earnings for 2Q’FY24.</li>
</ul>


Astera Labs reported solid 2Q’FY24. The company beat all key estimates, showed relatively strong demand and operating metrics.  
With the stock trading at 19x EV/2024E Revenue and 13x EV/2025E Revenue I see shares as fairly-valued and expect the stock to trade in-line with peers. PT to $39.00.
All remaining Astera Labs shares held by stockholders became eligible for sale as IPO lock-up expired following public release of earnings for 2Q’FY24.


Astera Labs: Solid 2Q’FY24, ADTV Jumped As IPO Lock-Up Expired, PT Moves To $39.00

<ul>
<li>Astera Labs announced financial results for 1Q’FY24 in May. According to IPO prospectus, ~5.9M shares became eligible for sale following public release of earnings for the first quarter of FY24.</li>
<li>The high-growth semiconductor company filed form S-8 on May 8, 2024. The selling stockholders, including current employees and service providers, offered additional ~3M shares as early lock-up expired.</li>
<li>Astera Labs shares currently trade at rich multiples of ~37x EV/FY24E Revenue and ~25x EV/FY25E Revenue on my revised forecasts.</li>
</ul>


Astera Labs announced financial results for 1Q’FY24 in May. According to IPO prospectus, ~5.9M shares became eligible for sale following public release of earnings for the first quarter of FY24.
The high-growth semiconductor company filed form S-8 on May 8, 2024. The selling stockholders, including current employees and service providers, offered additional ~3M shares as early lock-up expired.
Astera Labs shares currently trade at rich multiples of ~37x EV/FY24E Revenue and ~25x EV/FY25E Revenue on my revised forecasts.


Astera Labs: 1Q’FY24 GAAP Net Loss Could Disappoint Investors, Selling Stockholders Offer ~3M Shares

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

<ul>
<li>Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.</li>
<li>While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia's presentations at GTC and OFC 2024.</li>
<li>I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.</li>
</ul>


Nvidia CEO Jensen Huang has repeatedly emphasized that the data center is the new unit of compute.
While this concept seemed straightforward at first, the deeper implications became clearer after Nvidia's presentations at GTC and OFC 2024.
I only recently grasped exactly what is happening, and a simple reframing of the underlying principles that drove Moore’s Law makes the entire picture clearer.


The Data Center is the New Compute Unit: Nvidia's Vision for System-Level Scaling

<ul>
<li>Astera Labs, an overvalued fabless semiconductor company, has completed its IPO and raised ~$565M of net proceeds in the offering. The IPO was priced at $36/share.</li>
<li>Astera Labs shares jumped 70%+ in their first trading day and finished session at $62.03. The stock peaked at $95.21 on Tuesday and fell ~21% over the next 2 days.</li>
<li>According to their prospectus, ~5.9M shares of Astera Labs will be available for sale following the public release of earnings for 1Q’24, which I expect to be announced in April.</li>
</ul>


Astera Labs, an overvalued fabless semiconductor company, has completed its IPO and raised ~$565M of net proceeds in the offering. The IPO was priced at $36/share.
Astera Labs shares jumped 70%+ in their first trading day and finished session at $62.03. The stock peaked at $95.21 on Tuesday and fell ~21% over the next 2 days.
According to their prospectus, ~5.9M shares of Astera Labs will be available for sale following the public release of earnings for 1Q’24, which I expect to be announced in April.


Astera Labs: Early Lock-Up Expiry Is Coming, ~$450M Worth of Shares Will Be Available For Sale

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Our base case valuation is market cap of US$5.4 billion or target price of US$35.9 per share, which is 20% higher than high end of the IPO price range (US$30).</li>
<li>We estimate Astera Labs (ALAB US) to generate revenue of $221.3 million (up 91.1% YoY) in 2024 and $304.5 million (up 37.5% YoY) in 2025.</li>
<li>Many investors are willing to take extra risk to invest in companies such as Astera Labs that could generate strong sales growth amid rush to aggressively expand AI capabilities.</li>
</ul>


Our base case valuation is market cap of US$5.4 billion or target price of US$35.9 per share, which is 20% higher than high end of the IPO price range (US$30).
We estimate Astera Labs (ALAB US) to generate revenue of $221.3 million (up 91.1% YoY) in 2024 and $304.5 million (up 37.5% YoY) in 2025.
Many investors are willing to take extra risk to invest in companies such as Astera Labs that could generate strong sales growth amid rush to aggressively expand AI capabilities.


United States

Astera Labs, Inc. provides semiconductor-based connectivity solutions. The Company develops and deploys intelligent connectivity platforms built for cloud and AI infrastructure. Astera Labs serves customers in the United States, Canada, China, Taiwan, and Israel.

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Astera Labs (ALAB US)

Astera Labs: Solid 2Q’FY24, ADTV Jumped As IPO Lock-Up Expired, PT Moves To $39.00

Astera Labs shares could find a bottom near IPO price of $36.00 per share (~11x EV/2025E revs). I see shares as fairly-valued and move my PT to...

Andrei Zakharov

Astera Labs: 1Q’FY24 GAAP Net Loss Could Disappoint Investors, Selling Stockholders Offer ~3M Shares

Astera Labs shares underperformed and fell ~24% in May: 1Q’FY24 GAAP net loss could disappoint investors and the selling stockholders may sell...

Andrei Zakharov

The Data Center is the New Compute Unit: Nvidia's Vision for System-Level Scaling

Copper, Cooling, and Compute Density: The Pillars of Nvidia's Data Center Vision. Nvidia CEO Jensen Huang has repeatedly emphasized that the data...

Fabricated Knowledge

Astera Labs: Early Lock-Up Expiry Is Coming, ~$450M Worth of Shares Will Be Available For Sale

Astera Labs stock currently trades at 60x my 2024 revenue estimate of $215M and I view valuation multiples as unsustainable given upcoming early...

Andrei Zakharov

Astera Labs IPO Valuation Analysis

Our base case valuation of Astera Labs is market cap of US$5.4 billion or target price of US$35.9 per share, which is 20% higher than high end of...

Douglas Kim

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