Astera Labs (NASDAQ:ALAB) vs. Analog Devices (NASDAQ:ADI) Critical Contrast

Astera Labs (NASDAQ:ALAB) and Analog Devices (NASDAQ:ADI) are both large-cap technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.

Profitability

This table compares Astera Labs and Analog Devices’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Astera Labs	29.64%	25.35%	22.48%
Analog Devices	29.79%	16.39%	11.49%

Analyst Recommendations

This is a breakdown of recent ratings for Astera Labs and Analog Devices, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Astera Labs	0	10	13	0	2.57
Analog Devices	0	3	29	1	2.94

Astera Labs presently has a consensus target price of $320.85, indicating a potential upside of 38.95%. Analog Devices has a consensus target price of $460.55, indicating a potential upside of 12.58%. Given Astera Labs’ higher possible upside, analysts plainly believe Astera Labs is more favorable than Analog Devices.

Institutional and Insider Ownership

60.5% of Astera Labs shares are held by institutional investors. Comparatively, 86.8% of Analog Devices shares are held by institutional investors. 10.4% of Astera Labs shares are held by insiders. Comparatively, 0.4% of Analog Devices shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Astera Labs has a beta of 3.85, suggesting that its share price is 285% more volatile than the S&P 500. Comparatively, Analog Devices has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500.

Valuation and Earnings

This table compares Astera Labs and Analog Devices”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Astera Labs	$852.53 million	47.34	$219.13 million	$2.51	92.00
Analog Devices	$11.02 billion	17.99	$2.27 billion	$8.43	48.53

Analog Devices has higher revenue and earnings than Astera Labs. Analog Devices is trading at a lower price-to-earnings ratio than Astera Labs, indicating that it is currently the more affordable of the two stocks.

Summary

Analog Devices beats Astera Labs on 8 of the 15 factors compared between the two stocks.

About Astera Labs

Astera Labs, Inc. is a fabless semiconductor company that develops connectivity solutions for cloud and artificial intelligence infrastructure. Its products are designed to help move data among processors, accelerators, memory and other components in high-performance computing systems. The company’s portfolio includes Aries PCIe and CXL retimers, Taurus Ethernet smart cable modules, Scorpio fabric switches and Leo CXL memory connectivity controllers. Astera Labs also offers software tools to help customers configure and monitor its connectivity products.

About Analog Devices

Analog Devices, Inc. designs and manufactures semiconductor products that help customers sense, measure, interpret and process real-world signals. Its offerings include analog and mixed-signal integrated circuits, power management products, radio-frequency technology, sensors and digital signal processing solutions. The company’s products are used in industrial automation, automotive systems, communications infrastructure, healthcare equipment, consumer devices and aerospace and defense applications.