Astera Labs (NASDAQ:ALAB) & Allegro MicroSystems (NASDAQ:ALGM) Financial Review

Allegro MicroSystems (NASDAQ:ALGM) and Astera Labs (NASDAQ:ALAB) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Institutional and Insider Ownership

56.5% of Allegro MicroSystems shares are held by institutional investors. 0.5% of Allegro MicroSystems shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Allegro MicroSystems and Astera Labs”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allegro MicroSystems	$937.99 million	4.51	$152.70 million	$0.78	27.97
Astera Labs	$115.79 million	56.78	-$26.26 million	N/A	N/A

Allegro MicroSystems has higher revenue and earnings than Astera Labs.

Analyst Recommendations

This is a summary of current ratings and target prices for Allegro MicroSystems and Astera Labs, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allegro MicroSystems	0	1	8	0	2.89
Astera Labs	0	0	11	0	3.00

Allegro MicroSystems presently has a consensus price target of $34.44, suggesting a potential upside of 57.86%. Astera Labs has a consensus price target of $71.36, suggesting a potential upside of 70.03%. Given Astera Labs’ stronger consensus rating and higher probable upside, analysts plainly believe Astera Labs is more favorable than Allegro MicroSystems.

Profitability

This table compares Allegro MicroSystems and Astera Labs’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allegro MicroSystems	7.91%	13.88%	10.65%
Astera Labs	N/A	N/A	N/A

Summary

Allegro MicroSystems beats Astera Labs on 7 of the 11 factors compared between the two stocks.

About Allegro MicroSystems

Allegro MicroSystems, Inc., together with its subsidiaries, designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers; and photonic and advanced 3D sensing components. The company sells its products to original equipment manufacturers and suppliers primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.

About Astera Labs

Astera Labs, Inc. designs, manufactures, and sells semiconductor-based connectivity solutions for cloud and AI infrastructure. Its Intelligent Connectivity Platform is comprised of a portfolio of data, network, and memory connectivity products, which are built on a unifying software-defined architecture that enables customers to deploy and operate high performance cloud and AI infrastructure at scale. The company was incorporated in 2017 and is based in Santa Clara, California.