Needham analyst Quinn Bolton maintained a Buy rating on Allegro MicroSystems (ALGM – Research Report) today and set a price target of $25.00.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Quinn Bolton has given his Buy rating due to a combination of factors influencing Allegro MicroSystems’ performance. The company is experiencing a positive revenue trend, surpassing expectations, which is supported by indicators such as inventories, bookings, backlog, and component shortages that suggest a continued cyclical recovery.
Despite some challenges with gross margins, which are expected to hit a low point in the fourth quarter of fiscal year 2025, Allegro MicroSystems is projected to recover and aim for a 50% gross margin by fiscal year 2027. The company is also managing tariff impacts effectively and has the flexibility to adjust capacity if tariffs remain. These elements contribute to a positive outlook, justifying the Buy rating.
Bolton covers the Technology sector, focusing on stocks such as ON Semiconductor, Vicor, and Intel. According to TipRanks, Bolton has an average return of 12.3% and a 44.56% success rate on recommended stocks.
In another report released today, Evercore ISI also reiterated a Buy rating on the stock with a $29.00 price target.