Why Astera Labs Stock Is Plummeting Today

The Motley FoolFeb 11, 2026 7:01 PM

Key Points

Astera Labs Q4 report arrived with better-than-expected sales and earnings.
The company's forward guidance also looked pretty strong.
Investors reacted negatively to the Q4 report due to margin concerns and news that Astera's CFO is stepping into a different role.
10 stocks we like better than Astera Labs ›

Astera Labs (NASDAQ: ALAB) stock is selling off following the company's recent fourth-quarter report. The company's share price was down 19.7% as of 1:40 p.m. ET and had been off as much as 21.2% earlier in trading.

Astera Labs published its Q4 results after the market closed yesterday and reported sales and earnings for the period that beat the average Wall Street targets. On the other hand, the company announced that its chief financial officer was resigning and issued forward guidance and commentary that raised concerns about the outlook on margins.

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Astera Labs stock sinks despite big Q4 beats

Astera Labs reported non-GAAP (adjusted) earnings per share of $0.58 on revenue of $270.6 million -- a performance that came in far better than the average analyst estimates. The average Wall Street targets had called for the business to post adjusted earnings of $0.51 per share on sales of $249.55 million.

The semiconductor specialist's revenue surged nearly 92% higher year over year, and adjusted earnings per share were up roughly 57% compared to the prior-year period. It was another strong quarter for Astera Labs by most measures, but the stock is getting hit hard in response to a shakeup on the management team and fears that margins could weaken.

Margin concerns and CFO change are spurring sell-offs

For the current quarter, Astera is guiding for sales between $286 million and $297 million and a gross margin of roughly 74%. Meanwhile, adjusted earnings per share are projected to come in between $0.53 and $0.54. Guidance actually came in ahead of expectations on most key fronts, but some analysts are concerns that rising sales to Amazon will cause Astera Labs' margins to contract further out.

In addition to the margin fears, news that Mike Tate is transitioning from the CFO role to become a strategic advisor to CEO Jitendra Mohan also appears to be factoring into today's sell-off. Tate will be succeeded in the CFO role by Desmond Lynch, who will step into the position on March 2. While management shakeups often result in volatility for stocks, the passage of time could wind up showing that today's bearish action was an overreaction.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.

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