It has been about a month since the last earnings report for Astera Labs, Inc. (ALAB). Shares have lost about 16.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Astera Labs, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Astera Labs Q3 Earnings Beat Estimates, Revenues Rise Y/Y
Astera reported third-quarter 2025 non-GAAP earnings of 49 cents per share, surpassing the Zacks Consensus Estimate by 25.64%. The company reported earnings of 23 cents per share in the year-ago quarter.
Net revenues surged 103.9% year over year to $230.58 million, surpassing the Zacks Consensus Estimate by 11.53%. Growth was driven by new AI platform ramps featuring multiple product families.
ALAB’s Top-Line Details
Astera Labs is ramping up production of its PCIe 6 product portfolio for customized rack-scale AI systems. In the reported quarter, Scorpio P-Series fabric switches have won multiple design wins across various AI platforms, including those supported by merchant GPUs such as NVIDIA's GB300 and B300, as well as custom AI accelerators.
The company saw strong demand for its signal conditioning portfolio, driven by PCIe scale-up and Ethernet scale-out connectivity applications in custom ASIC platforms.
ALAB’s Operating Details
The non-GAAP gross margin was 76.4%, contracting 140 basis points (bps) year over year.
Research and development expenses surged 55.8% year over year to $78.9 million.
Sales and marketing expenses decreased 16.7% year over year to $19.4 million. General and administrative expenses decreased 3.3% year over year to $22.1 million.
The non-GAAP operating margin was 41.7% compared with 32.4% in the year-ago quarter.
ALAB’s Balance Sheet Details
As of Sept. 30, 2025, cash and cash equivalents and marketable securities were $1.13 billion compared with $1.07 billion as of June 30, 2025.
ALAB’s Q4 Guidance
Astera Labs expects fourth-quarter 2025 revenues between $245 million and $253 million.
Non-GAAP gross margin is expected to be roughly 75%. Non-GAAP operating expenses are expected to be between $85 million and $90 million.
Earnings are expected to be approximately 51 cents per share for the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 31.52% due to these changes.
VGM Scores
Currently, Astera Labs, Inc. has a great Growth Score of A, a score with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Astera Labs, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Astera Labs, Inc. belongs to the Zacks Internet - Software industry. Another stock from the same industry, Meta Platforms (META), has gained 0.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2025.
Meta Platforms reported revenues of $51.24 billion in the last reported quarter, representing a year-over-year change of +26.2%. EPS of $7.25 for the same period compares with $6.03 a year ago.
For the current quarter, Meta Platforms is expected to post earnings of $8.15 per share, indicating a change of +1.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Meta Platforms. Also, the stock has a VGM Score of C.
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Astera Labs, Inc. (ALAB): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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