Astera Labs' blowout first earnings report is met with a sagging stock reaction

By Emily Bary

The chip stock has more than doubled from its March IPO price

Despite upbeat results for newly public semiconductor company Astera Labs Inc., its shares fell 6% in Tuesday's after-hours action.

The company recorded a first-quarter net loss of $93 million, or $1.77 a share, compared with $17 million, or 49 cents a share, in the year-prior period.

On an adjusted basis, Astera Labs (ALAB) posted earnings per share of 10 cents, while analysts tracked by FactSet were looking for 4 cents.

Revenue for Astera Labs rose 29% to $65.3 million, while analysts had been forecasting $56.7 million.

The company went public in March with a $36 initial-public-offering price. Shares have more than doubled since to close Tuesday at $76.19.

That sharp rally in the lead-up to earnings could help explain the stock's negative reaction to the better-than-expected earnings, as it could have raised the bar for the company's results and outlook. Astera Labs shares were off about 11% in Tuesday's extended session.

See also: Astera Labs' stock soars, as investors cheer the debut of a new AI chip play

Astera Labs specializes in connectivity for chips. The company sees opportunities, especially with the artificial-intelligence boom, to help chips communicate within a data center.

"As hyperscalers embark on a significant transformation of their data centers to support AI applications with increased capital investment, we're witnessing the emergence of a multiyear growth cycle," Chief Executive Jitendra Mohan said in an earnings release, Astera's first since going public.

In looking at the second quarter, management is forecasting 10% to 12% growth in revenue "compared with the prior quarter." Analysts are modeling $62.8 million in revenue.

The company is also anticipating 11 cents a share in adjusted earnings, whereas analysts are modeling 6 cents a share.

Read: Why Astera Labs' stock strikes bulls as a unique buy despite lofty valuation

-Emily Bary

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05-07-24 2012ET

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