Allegro Microsystems, Inc. (ALGM)
NASDAQ:ALGM
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Allegro MicroSystems
(NASDAQ:ALGM)
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Rating:66Neutral
Price Target:
$35.00
▲(5.17% Upside)
Action:ReiteratedDate:01/30/26
The score is driven by improving operational momentum and upbeat guidance from the latest earnings call, alongside supportive price momentum. Offsetting this are still-weak profitability (despite better cash flow) and a negative P/E that reduces valuation support.
Positive Factors
Cash generation & liquidity
Quarterly operating cash flow and free cash flow strength, plus $163M cash and $256M undrawn credit, provide a durable liquidity buffer. This funds product ramps, R&D and working capital through the earnings recovery, lowering financing risk over the next several quarters.
Negative Factors
Profitability weakness
While revenue has stabilized, the company reported TTM and FY2025 net losses, reversing prior profitability. Persistent negative earnings reduce return on capital, constrain internal reinvestment, and make continued margin recovery essential to sustain credit quality and fund growth without dilutive financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation & liquidity
Quarterly operating cash flow and free cash flow strength, plus $163M cash and $256M undrawn credit, provide a durable liquidity buffer. This funds product ramps, R&D and working capital through the earnings recovery, lowering financing risk over the next several quarters.
Read all positive factors
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.65B
Dividend YieldN/A
Average Volume (3M)1.74M
Price to Earnings (P/E)149.9
Beta (1Y)1.86
Revenue Growth-7.23%
EPS Growth-15.69%
CountryUS
Employees4,593
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.15
Shares Outstanding185,290,860
10 Day Avg. Volume1,487,006
30 Day Avg. Volume1,736,676
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 Cap1.02
Enterprise Value/Revenue8.10
Enterprise Value/Gross Profit18.03
Enterprise Value/Ebitda115.41
Forecast
1Y Price Target
$46.20Price Target Upside38.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)0.97
Revenue Forecast (FY)$1.05B
Allegro MicroSystems Business Overview & Revenue Model
Company Description
Allegro 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 p...
How the Company Makes Money
Allegro primarily makes money by selling semiconductor integrated circuits (ICs) to original equipment manufacturers (OEMs) and to automotive and industrial supply-chain customers through direct sales and distribution channels. Revenue is largely ...
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational momentum: above‑guide revenue and EPS, double‑digit year‑over‑year sales growth, record data center contribution, robust cash generation, meaningful design wins across strategic end markets, and constructive Q4 guidance. Challenges include modest pricing pressure (low single‑digit ASP declines), mix/geography impacts (China exposure) that slightly pressured margins, automotive shipments still below peak levels, and near‑term OpEx increases tied to variable compensation and payroll resets. Overall, the positives (solid growth, margin improvement, product innovation and healthy cash flow) substantially outweighed the noted headwinds.Positive Updates
Revenue and EPS Beat
Q3 net sales were $229 million, above the high end of guidance. Non-GAAP EPS was $0.15, above the midpoint. Q3 sales increased 7% sequentially and 29% year‑over‑year; EPS increased 15% sequentially and 114% year‑over‑year.
Negative Updates
Geographic and Mix Pressure on Gross Margin
China comprised 30% of Q3 ship‑to sales, which management said reduced gross margin roughly ~10 basis points versus guidance midpoint; company still expects low single‑digit ASP declines (albeit less pronounced vs prior year).
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue and EPS Beat
Q3 net sales were $229 million, above the high end of guidance. Non-GAAP EPS was $0.15, above the midpoint. Q3 sales increased 7% sequentially and 29% year‑over‑year; EPS increased 15% sequentially and 114% year‑over‑year.
Read all positive updates
Company Guidance
For the March quarter management guided sales of $230–$240 million (midpoint ≈ +22% year‑over‑year), non‑GAAP gross margin of 49–51% (midpoint implying roughly +440 basis points vs. 2025), operating expenses expected to rise ~3% sequentially (largely payroll tax resets), interest expense of about $5.0 million (including roughly $0.7 million of repricing costs), a tax rate of ~8%, weighted‑average diluted shares of ~186 million, and non‑GAAP EPS of $0.14–$0.18; they also noted a term‑loan repricing of -25 bps to SOFR +175 bps.Allegro MicroSystems Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
70
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 839.73M | 725.01M | 1.05B | 973.65M | 768.67M | 591.21M |
| Gross Profit | 377.57M | 321.53M | 574.53M | 546.08M | 407.46M | 278.90M |
| EBITDA | 58.97M | 9.17M | 276.94M | 264.49M | 191.77M | 50.68M |
| Net Income | -13.21M | -73.01M | 152.70M | 187.36M | 119.41M | 17.95M |
Balance Sheet | ||||||
| Total Assets | 1.42B | 1.42B | 1.53B | 1.18B | 892.62M | 747.68M |
| Cash, Cash Equivalents and Short-Term Investments | 163.40M | 121.33M | 212.14M | 351.58M | 282.38M | 197.21M |
| Total Debt | 322.80M | 368.49M | 275.21M | 42.54M | 41.45M | 25.00M |
| Total Liabilities | 458.30M | 489.86M | 398.89M | 214.34M | 157.26M | 160.81M |
| Stockholders Equity | 964.41M | 929.55M | 1.13B | 965.63M | 734.21M | 585.75M |
Cash Flow | ||||||
| Free Cash Flow | 121.16M | 21.96M | 56.94M | 113.43M | 86.19M | 79.90M |
| Operating Cash Flow | 147.71M | 61.91M | 181.72M | 193.21M | 156.13M | 120.57M |
| Investing Cash Flow | -27.73M | -40.82M | -516.72M | -99.70M | -66.27M | -68.25M |
| Financing Cash Flow | -107.89M | -112.06M | 198.88M | -20.00M | -5.31M | -72.19M |
Allegro MicroSystems Technical Analysis
Positive
33.28
Price Trends
35.30
Positive
31.68
Positive
31.51
Positive
Market Momentum
-0.25
Negative
59.58
Neutral
86.66
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGM, the sentiment is Positive. The current price of 33.28 is above the 20-day moving average (MA) of 31.84, below the 50-day MA of 35.30, and above the 200-day MA of 31.51, indicating a bullish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 59.58 is Neutral, neither overbought nor oversold. The STOCH value of 86.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $7.90B | 10.99 | 20.13% | ― | 2.19% | 19.22% | |
68 Neutral | $12.96B | 26.10 | 8.73% | 0.81% | 0.13% | -16.17% | |
68 Neutral | $10.39B | -205.54 | -4.23% | ― | 59.04% | 28.50% | |
66 Neutral | $6.65B | 149.88 | -1.40% | ― | -7.23% | -15.69% | |
65 Neutral | $6.93B | -66.51 | -6.05% | ― | 47.10% | 64.29% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
55 Neutral | $8.08B | -177.61 | -7.22% | ― | 20.60% | ― |
* Technology Sector Average
ALGM
Allegro MicroSystems
35.87
12.64
54.41%
AMKR
Amkor
52.42
34.65
195.01%
CRUS
Cirrus Logic
154.82
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71.58%
SMTC
Semtech
86.95
56.97
190.03%
SLAB
Silicon Laboratories
210.36
110.95
111.61%
SITM
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394.92
245.02
163.46%
Allegro MicroSystems Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Allegro MicroSystems Adds New Term Loan Tranche
Positive
Jan 21, 2026
On January 21, 2026, Allegro MicroSystems, Inc. amended its existing credit agreement to add a new $285 million tranche of term loans maturing on October 31, 2030, primarily to refinance all outstanding term loans issued under a prior amendment, c...
Business Operations and StrategyPrivate Placements and Financing
Allegro MicroSystems Announces New Term Loan Refinancing
Positive
Jan 16, 2026
On January 15, 2026, Allegro MicroSystems, Inc. completed the allocation of a $285 million U.S. dollar-denominated first lien term facility maturing in October 2030, with an expected interest margin of 1.75% over the secured overnight financing ra...
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.