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Astera Labs (ALAB) is heading into what is likely to be its biggest quarter yet. Management expects third-quarter revenue of $540 million to $560 million and non-GAAP EPS of $1.16 to $1.21, up from $0.80 in Q2. Revenue of $392.4 million in Q2 was also a company record, so expecting revenue to jump about 40% next quarter shows how fast Astera is growing.
Even so, Northland Capital Markets cut ALAB stock to “Market Perform” from “Outperform” on Oct. 9, citing valuation concerns. Analyst Gus Richard noted that shares had climbed past Northland's earlier target. Yet Richard still sees estimates moving higher as Scorpio X ramps, calling EPS of $5 in 2028 achievable. The analyst also pointed to Astera’s heavy reliance on a small number of customers, a risk the company has long faced.
