QS Research · Michael Burry's Scion Capital analyst template · 2006
Astera Labs, Inc. (ALAB)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -49% · upside +21%
At $190.71 the market pays 20.53x TTM EV/Sales and 77.4x EV/EBITDA for a business that is genuinely compounding: Q3 2026 revenue was $584.9M, up 154% YoY, and Q4 2026 is guided to $730-750M. Using section 13's TTM revenue base of $1.56B at today's 20.53x EV/Sales roughly reproduces today's price, so the base case is 0%; 10.0x EV/Sales gives $96.90 (-49.2%) and 25.0x gives $230.78 (+21.0%). Because the base case is not +30% and the downside is worse than -25%, this is not a long; because the base case is not -30%, it is not a short, so the rule leaves watch. The market is not missing the growth; it is already paying a premium above every listed peer, while margin compression, working-capital build, customer concentration and a one-way insider-sale tape are reasons to wait for a better price or clearer margin stabilization.
Key numbers
- Share price: $190.71
- Market cap: $33.33B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $1.56B
- EV / EBITDA (TTM): 77.4x
- P/E (TTM): 72.3x
- Price / book: 16.67x
The 15 boxes
- ✓ 1. Long-form business notes
Astera Labs sells semiconductor connectivity products (Aries retimers/cable modules, Taurus Ethernet cable modules, Leo CXL memory controllers, Scorpio fabric switches) wrapped in its COSMOS software, built on a fabless TSMC supply chain and sold direct and through fulfillment distributors into a very small, concentrated set of hyperscaler/OEM end customers. The XBRL record shows the ramp: revenue $79.9M (FY2022) to $115.8M (FY2023) to $396.3M (FY2024) to $852.5M (FY2025), with operating income turning positive at $173.4M in FY2025 after -$116.1M in FY2024, and operating cash flow of $319.3M against $37.5M of capex. Concentration rose with scale: top three end customers were ~86% of FY2025 revenue versus ~80% of FY2024 revenue. The two Item 1 sections show little business-model change besides a larger patent estate, more R&D locations and a stated 756 employees at 12/31/2025.
- ✓ 2. Competitive advantage
A real but narrow moat: growth and now scale (FY2025 revenue $852.5M, gross profit $645.3M, operating income $173.4M, operating cash flow $319.3M) with design-win lock-in as the main switching cost, but the FY2025 profit is the first profitable year after three years of operating losses. The 10-K says competitors (Broadcom, Credo, Marvell, Microchip, Montage, Parade, Rambus) compete on 'some, but not all' of its solutions, and prices on current-generation products 'often decrease over time'. Concentration is the counterweight: one end customer was more than 70% of 2025 revenue, the top three ~86%, and most historical sales came from one product family (Aries Smart DSP Retimers).
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) was a step-change quarter: revenue $584.9 million, up 154% year over year and 49% sequentially, with Scorpio now the largest product family. Growth came with margin give-back — GAAP gross margin fell 390 bps to 72.3% on inventory-related charges, manufacturing overhead and the Warrants — while GAAP operating income rose 223% to $179.1 million (30.6% margin). Net income of $182.9 million is after $13.0 million of interest/other income, and the nine-month $416.3 million figure carries a $48.1 million income tax benefit, so the operating line is the cleaner read. Cash is $1.4 billion and nine-month operating cash flow $341.5 million, but inventory rose $139.1 million and receivables $197.2 million; Q4 2026 guidance is $730-750 million of revenue.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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