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Allegro MicroSystems (ALGM)
NASDAQ:ALGM
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Allegro MicroSystems
(NASDAQ:ALGM)
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Rating:51Neutral
Price Target:
$30.00
▲(0.23% Upside)
Allegro MicroSystems' overall stock score is primarily impacted by financial challenges, including declining revenue and profitability. The technical analysis indicates bearish trends, while the valuation is poor due to negative earnings. However, the positive sentiment from the earnings call, highlighting growth in strategic areas and a strong outlook, provides some optimism.
Positive Factors
Innovative Product Releases
The release of innovative products like the ASIL-C current sensor and motor driver IC showcases Allegro's leadership in technology, supporting its competitive edge in the evolving electric vehicle and data center markets.
Strong Design Win Activity
High design win activity in strategic areas indicates robust demand for Allegro's products, ensuring sustained revenue growth and reinforcing its market position in key sectors.
Positive Second Quarter Outlook
The positive sales outlook for the second quarter suggests continued growth momentum, driven by strong demand in core segments, which supports long-term financial stability.
Negative Factors
Declining Revenue and Profitability
The decline in revenue and profitability indicates operational challenges, which could impact Allegro's ability to invest in growth and maintain competitive advantages over time.
Increased Leverage
Increased leverage may limit financial flexibility and elevate risk, potentially affecting Allegro's capacity to navigate economic downturns or invest in strategic initiatives.
Challenges in Legacy Automotive Business
Declines in the legacy automotive segment highlight vulnerabilities in Allegro's traditional markets, which may require strategic shifts to sustain growth amid changing industry dynamics.
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.75B
Dividend YieldN/A
Average Volume (3M)1.44M
Price to Earnings (P/E)―
Beta (1Y)1.60
Revenue Growth-18.82%
EPS Growth-195.20%
CountryUS
Employees4,593
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.09
Shares Outstanding185,040,480
10 Day Avg. Volume1,507,816
30 Day Avg. Volume1,444,198
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)5.02
Price to Sales (P/S)6.44
P/FCF Ratio212.51
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue8.54
Enterprise Value/Gross Profit19.25
Enterprise Value/Ebitda394.52
Forecast
1Y Price Target
$38.00Price Target Upside26.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Allegro MicroSystems Business Overview & Revenue Model
Company DescriptionAllegro MicroSystems, Inc. designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; power ICs comprising motor driver ICs, and regulator and LED driver ICs; and photonic and 3D sensing components, including photodiodes, eye-safe lasers, and readout ICs for LiDAR applications. The company sells its products to original equipment manufacturers and suppliers primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.
How the Company Makes MoneyAllegro MicroSystems generates revenue primarily through the sale of its semiconductor products to a diverse range of customers, including automotive manufacturers, industrial equipment makers, and consumer electronics companies. Key revenue streams include the sale of magnetic sensors and power management ICs, which are crucial for applications in electric vehicles and industrial automation. Additionally, Allegro benefits from long-term partnerships with prominent automotive and industrial firms, which provide stable demand for its products. The company's focus on research and development allows it to introduce innovative solutions that meet evolving market needs, thereby driving growth and profitability.
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with strong financial performance, innovation, and strategic wins, though tempered by challenges in legacy automotive, operational costs, and competition in China.Q1-2026 Updates
Positive Updates
Strong First Quarter Financial Performance
Sales reached $203 million, exceeding guidance, with a gross margin of 48.2% and non-GAAP EPS of $0.09, above the midpoint of guidance.
Significant Growth in Automotive and Industrial Segments
Automotive sales increased by 13% year-over-year, driven by a 31% increase in e-Mobility. Industrial and Other sales rose by 50% year-over-year, with notable growth in Data Center, Robotics, and Automation.
Innovative Product Releases
Released an ASIL-C current sensor for xEV inverters and a 48-volt motor driver IC for AI data center cooling fans, demonstrating leadership in innovation.
Strong Design Win Activity
Over 75% of design wins in strategic areas like e-Mobility, Data Center, Robotics, and Clean Energy, with notable traction inverter win in China.
Positive Second Quarter Outlook
Sales guidance for Q2 2026 is between $205 million to $215 million, indicating a 12% year-over-year increase.
Negative Updates
Challenges in Legacy Automotive Business
Non-e-Mobility automotive revenue experienced a decline due to inventory dynamics and timing of purchases.
Foreign Exchange and Operational Expenses
Gross margin faced headwinds from foreign exchange fluctuations, and operating expenses were $3 million above outlook due to variable compensation and R&D timing.
Competitive and Geopolitical Pressures in China
Stiff competition and geopolitical concerns present challenges, although the company continues to win business in China.
Company Guidance
During the Allegro MicroSystems First Quarter Fiscal Year 2026 earnings call, the company reported sales of $203 million and a gross margin of 48.2%, both surpassing the high end of their guidance ranges. Non-GAAP EPS was $0.09, exceeding the midpoint of the guidance range. The automotive segment, led by e-Mobility, experienced sequential sales growth of 3% and a year-over-year increase of 13%, with e-Mobility sales specifically growing by 16% sequentially and 31% year-over-year. Industrial and Other sales rose 11% sequentially and 50% year-over-year. The company highlighted a strong pipeline of design wins, with over 75% in strategic focus areas such as e-Mobility, Data Center, Robotics and Automation, Clean Energy, and Medical Applications. Allegro also outlined its second-quarter outlook, forecasting sales between $205 million and $215 million, with a gross margin of 48% to 50% and non-GAAP EPS ranging from $0.10 to $0.14.Allegro MicroSystems Financial Statement Overview
Summary
Allegro MicroSystems is facing financial headwinds with declining revenue and profitability impacting its income statement. The balance sheet shows a solid equity base but increased leverage. Cash flow generation remains a positive aspect, suggesting operational resilience despite recent challenges.Income Statement
Allegro MicroSystems has experienced a decline in revenue and profitability in recent periods. The TTM data shows a negative EBIT and net income, indicating operational challenges. The gross profit margin remains moderate, but declining revenue growth and negative net profit margins are concerning.40
Negative
Balance Sheet
The company maintains a reasonable equity position with a debt-to-equity ratio that is manageable, though it has increased compared to previous years. The return on equity has turned negative recently due to losses, but a solid equity ratio reflects potential for recovery.55
Neutral
Cash Flow
Cash flow remains a relative strength for Allegro MicroSystems, with positive operating cash flow and free cash flow in the TTM. However, cash flow growth has been inconsistent, and the free cash flow to net income ratio is elevated due to negative net income.60
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 761.49M | 725.01M | 1.05B | 973.65M | 768.67M | 591.21M |
| Gross Profit | 338.06M | 321.53M | 574.53M | 546.08M | 407.46M | 278.90M |
| EBITDA | 16.49M | 9.17M | 276.94M | 264.49M | 191.77M | 50.68M |
| Net Income | -68.56M | -73.01M | 152.70M | 187.36M | 119.41M | 17.95M |
Balance Sheet | ||||||
| Total Assets | 1.39B | 1.42B | 1.53B | 1.18B | 892.62M | 747.68M |
| Cash, Cash Equivalents and Short-Term Investments | 129.11M | 121.33M | 212.14M | 351.58M | 282.38M | 197.21M |
| Total Debt | 335.08M | 368.49M | 275.21M | 42.54M | 41.45M | 25.00M |
| Total Liabilities | 464.95M | 489.86M | 398.89M | 214.34M | 157.26M | 160.81M |
| Stockholders Equity | 922.65M | 929.55M | 1.13B | 965.63M | 734.21M | 585.75M |
Cash Flow | ||||||
| Free Cash Flow | 49.76M | 21.96M | 56.94M | 113.43M | 86.19M | 79.90M |
| Operating Cash Flow | 89.33M | 61.91M | 181.72M | 193.21M | 156.13M | 120.57M |
| Investing Cash Flow | -40.44M | -40.82M | -516.72M | -99.70M | -66.27M | -68.25M |
| Financing Cash Flow | -95.87M | -112.06M | 198.88M | -20.00M | -5.31M | -72.19M |
Allegro MicroSystems Technical Analysis
Negative
29.93
Price Trends
31.69
Negative
30.60
Negative
26.97
Positive
Market Momentum
-0.15
Negative
41.61
Neutral
44.86
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGM, the sentiment is Negative. The current price of 29.93 is below the 20-day moving average (MA) of 30.67, below the 50-day MA of 31.69, and above the 200-day MA of 26.97, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 41.61 is Neutral, neither overbought nor oversold. The STOCH value of 44.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALGM.
Allegro MicroSystems Risk Analysis
Allegro MicroSystems disclosed 42 risk factors in its most recent earnings report. Allegro MicroSystems reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Allegro MicroSystems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | 6.48B | 19.75 | 18.14% | ― | 4.52% | 18.89% | |
76 Outperform | 7.17B | 23.79 | 7.24% | 2.54% | -1.20% | -19.46% | |
65 Neutral | 5.46B | 266.71 | 4.30% | ― | 22.22% | ― | |
61 Neutral | 7.61B | -83.98 | -13.38% | ― | 65.12% | 15.46% | |
57 Neutral | 4.29B | -40.53 | -17.69% | ― | 29.66% | 47.97% | |
51 Neutral | $5.75B | ― | -6.75% | ― | -18.82% | -195.20% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
ALGM
Allegro MicroSystems
29.71
6.41
27.51%
AMKR
Amkor
29.02
-0.66
-2.22%
CRUS
Cirrus Logic
126.14
1.93
1.55%
SMTC
Semtech
62.97
17.31
37.91%
SLAB
Silicon Laboratories
130.64
15.07
13.04%
SITM
SiTime Corporation
292.76
121.25
70.70%
Allegro MicroSystems Corporate Events
Executive/Board ChangesShareholder Meetings
Allegro MicroSystems Holds Annual Shareholders Meeting
Neutral
Aug 8, 2025
On August 7, 2025, Allegro MicroSystems held its Annual Meeting of Shareholders where three key proposals were addressed. Shareholders elected three directors, ratified the appointment of PricewaterhouseCoopers as the independent auditor for the fiscal year ending March 27, 2026, and approved the company’s executive compensation, reflecting continued support for the company’s strategic direction.
The most recent analyst rating on (ALGM) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Allegro MicroSystems stock, see the ALGM Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.