Bank of America Securities analyst Vivek Arya has reiterated their bullish stance on ALGM stock, giving a Buy rating yesterday.
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Vivek Arya has given his Buy rating due to a combination of factors that highlight Allegro MicroSystems’ potential for growth and profitability. The company is well-positioned in the automotive sector, particularly in the high-growth areas of e-mobility and advanced driver-assistance systems (ADAS), with a projected serviceable available market (SAM) of $12 billion by 2030. Allegro’s new integrated gate driver technology is expected to significantly increase its content per electric vehicle, further enhancing its market presence.
Additionally, Allegro is experiencing a cyclical recovery with a growing backlog and minimal cancellations, indicating strong demand. The company’s management is optimistic about achieving gross margin expansion, supported by operational efficiencies and a favorable pricing environment. Allegro’s extensive magnetic sensing portfolio and strategic initiatives in China also provide competitive advantages, reinforcing its position in the market. These factors, combined with a robust technology pipeline and the potential for long-term earnings growth, underpin Arya’s Buy recommendation.
In another report released yesterday, Loop Capital Markets also maintained a Buy rating on the stock with a $42.00 price target.
ALGM’s price has also changed dramatically for the past six months – from $23.680 to $36.890, which is a 55.79% increase.