Astera Labs (NASDAQ:ALAB – Get Free Report) and Aehr Test Systems (NASDAQ:AEHR – Get Free Report) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.
Profitability
This table compares Astera Labs and Aehr Test Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Astera Labs | 30.74% | 19.24% | 17.27% |
| Aehr Test Systems | -14.25% | -3.83% | -3.36% |
Institutional & Insider Ownership
60.5% of Astera Labs shares are held by institutional investors. Comparatively, 69.7% of Aehr Test Systems shares are held by institutional investors. 10.4% of Astera Labs shares are held by company insiders. Comparatively, 6.8% of Aehr Test Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Analyst Recommendations
This is a summary of recent ratings and price targets for Astera Labs and Aehr Test Systems, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Astera Labs | 0 | 10 | 13 | 0 | 2.57 |
| Aehr Test Systems | 1 | 0 | 3 | 2 | 3.00 |
Astera Labs presently has a consensus target price of $325.25, indicating a potential upside of 2.02%. Aehr Test Systems has a consensus target price of $117.50, indicating a potential downside of 9.08%. Given Astera Labs’ higher possible upside, research analysts clearly believe Astera Labs is more favorable than Aehr Test Systems.
Earnings & Valuation
This table compares Astera Labs and Aehr Test Systems”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 | 64.88 | $219.13 million | $2.02 | 157.82 |
| Aehr Test Systems | $50.00 million | 84.31 | -$7.13 million | ($0.24) | -538.46 |
Astera Labs has higher revenue and earnings than Aehr Test Systems. Aehr Test Systems 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
Astera Labs beats Aehr Test Systems on 11 of the 15 factors compared between the two stocks.
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.
About Aehr Test Systems
Aehr Test Systems provides test solutions for testing, burning-in, and semiconductor devices in wafer level, singulated die, and package part form, and installed systems worldwide. Its product portfolio includes FOX-XP and FOX-NP systems that are full wafer contact and singulated die/module test and burn-in systems that can test, burn-in, and stabilize range of devices, including silicon carbide-based and other power semiconductors, 2D and 3D sensors used in mobile phones, tablets and other computing devices, memory semiconductors, processors, microcontrollers, systems-on-a-chip, and photonics and integrated optical devices. The company also offers FOX-CP system, a low-cost single-wafer compact test solution for logic, memory, and photonic devices; FOX WaferPak Contactor, a full wafer contactor capable of testing wafers up to 300mm that enables integrated circuit manufacturers to perform test, burn-in, and stabilization of full wafers on the FOX-P systems. In addition, it provides FOX DiePak Carrier, a reusable temporary package that enables IC manufacturers to perform final test and burn-in of bare die and modules; and FOX DiePak Loader. The company was incorporated in 1977 and is headquartered in Fremont, California.
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