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Allegro MicroSystems (ALGM)
NASDAQ:ALGM
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Allegro MicroSystems
(NASDAQ:ALGM)
Rating:53Neutral
Price Target:
$32.00
▲(0.34% Upside)
Positive Factors
Financial Performance
Management expresses confidence in expanding gross margins to over 50% soon, supported by operational efficiencies and a favorable pricing and cost environment.
Market Opportunity
Allegro Microsystems sees a significant market opportunity in the auto sector with a $12 billion serviceable available market by 2030, driven by high growth in e-mobility sectors like electric vehicles and advanced driver assistance systems.
Product Portfolio
Allegro Microsystems has a competitive advantage with the broadest magnetic sensing portfolio, offering significant bundling opportunities and developing advanced technologies.
Negative Factors
Market Challenges
Auto semis were last into the downturn and could take time to recover vs. industrial semis that have begun their cyclical recovery process.
Shareholder Dynamics
Sanken Electric owns 32% of the company and could sell shares in September after its lock-up period ends.
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.52B
Dividend YieldN/A
Average Volume (3M)2.04M
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue Growth-18.82%
EPS Growth-195.20%
CountryUS
Employees4,593
SectorTechnology
Sector Strength97
IndustrySemiconductors
Share Statistics
EPS (TTM)0.09
Shares Outstanding185,040,480
10 Day Avg. Volume1,746,050
30 Day Avg. Volume2,035,040
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 Cap1.18
Enterprise Value/Revenue8.54
Enterprise Value/Gross Profit19.25
Enterprise Value/Ebitda394.52
Forecast
1Y Price Target
$38.09Price Target Upside19.44% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
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 original equipment manufacturers (OEMs) and distributors in the automotive and industrial markets. The company's key revenue streams include magnetic sensors and power ICs, which are integrated into a wide range of applications such as electric vehicles, industrial automation, and renewable energy systems. Allegro's strategic partnerships with major automotive companies and its focus on innovation in sensor technology contribute significantly to its earnings. Additionally, the company's investment in research and development to create cutting-edge semiconductor solutions plays a crucial role in maintaining its competitive edge and driving revenue growth.
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q1-2026)
| % Change Since: -5.85%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call for Allegro MicroSystems presented a positive outlook with strong first-quarter results exceeding expectations in sales and gross margins. Automotive and Industrial segments showed robust growth, supported by strategic design wins and innovative product releases. However, challenges persist in the form of mixed signals from the automotive market, competition and geopolitical issues in China, and slightly elevated operating expenses. Overall, the company's performance and strategic initiatives outweigh the concerns.Q1-2026 Updates
Positive Updates
Strong First Quarter Results
Sales and gross margin exceeded guidance ranges at $203 million and 48.2%, respectively. Non-GAAP EPS of $0.09 was above the midpoint of guidance.
Automotive Sales Growth
E-Mobility led automotive sales growth with a 16% sequential increase and 31% year-over-year growth, driven by current sensors for xEV applications.
Industrial and Other Sales Increase
Industrial and Other sales increased by 11% sequentially and 50% year-over-year, with contributions from Data Center, Robotics, Automation, and Clean Energy.
Innovative Product Releases
Released an innovative ASIL-C current sensor and a 48-volt motor driver IC, improving efficiency and cost-effectiveness in automotive and data center applications.
Strong Design Win Activity
Over 75% of first-quarter design wins were in strategic focus areas, with significant wins in e-Mobility and Data Center.
Positive Gross Margin Trends
Gross margin increased by 260 basis points sequentially, achieving 48.2%, driven by cost optimizations and improved pricing leverage.
Negative Updates
Mixed Automotive Demand Signals
Despite positive trends, there are mixed signals from larger peers about automotive demand recovery, and some Western OEMs revised profit forecasts down due to tariffs.
China Market Challenges
Continued competition and geopolitical concerns in China, although strategic efforts like the China-for-China supply chain aim to address these issues.
OpEx Above Expectations
Operating expenses were $75 million, about $3 million above outlook due to increased variable compensation, R&D spend timing, and currency impacts.
Company Guidance
During Allegro MicroSystems' first-quarter fiscal year 2026 earnings call, the company reported sales of $203 million, exceeding the high end of their guidance, with a gross margin of 48.2%. Non-GAAP earnings per share were $0.09, also surpassing expectations. The company highlighted strong bookings and an increasing backlog, with e-Mobility leading automotive sales growth, particularly in current sensors for xEV applications. Industrial sales, including Data Center and Robotics, also showed strength, contributing to a 22% year-over-year sales increase. Allegro's strategic focus on relentless innovation was emphasized, with new product releases like the ASIL-C current sensor and a 48-volt motor driver IC. For the second quarter, Allegro projects sales between $205 million and $215 million, with a gross margin between 48% and 50%, and non-GAAP EPS expected to range from $0.10 to $0.14.Allegro MicroSystems Financial Statement Overview
Summary
Allegro MicroSystems faces financial challenges with declining revenue and negative profitability impacting its income statement. However, the balance sheet shows a reasonable equity position despite increased leverage, and positive cash flow generation indicates some operational resilience.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 | 190.33M | 49.46M |
| 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
Positive
31.89
Price Trends
32.81
Negative
27.85
Positive
25.53
Positive
Market Momentum
-0.70
Positive
46.25
Neutral
52.14
Neutral
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 31.89 is below the 20-day moving average (MA) of 32.97, below the 50-day MA of 32.81, and above the 200-day MA of 25.53, indicating a neutral trend. The MACD of -0.70 indicates Positive momentum. The RSI at 46.25 is Neutral, neither overbought nor oversold. The STOCH value of 52.14 is Neutral, 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
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.58B | 17.01 | 18.53% | ― | 4.52% | 18.89% | |
77 Outperform | $6.02B | 19.88 | 7.37% | 3.01% | -1.20% | -19.46% | |
60 Neutral | $4.57B | ― | -93.41% | ― | 13.83% | 88.14% | |
57 Neutral | $4.29B | ― | -9.71% | ― | 29.66% | 47.97% | |
55 Neutral | $2.59B | 78.49 | 4.68% | 1.71% | 7.16% | -21.24% | |
53 Neutral | $5.52B | ― | -6.75% | ― | -18.82% | -195.20% | |
50 Neutral | C$3.52B | 0.80 | -5.03% | 7.64% | 16.88% | -2.22% |
* Technology Sector Average
Performance Comparison
ALGM
Allegro MicroSystems
31.86
8.20
34.66%
AMKR
Amkor
24.96
-5.95
-19.25%
CRUS
Cirrus Logic
110.66
-26.42
-19.27%
POWI
Power Integrations
48.44
-10.39
-17.66%
SMTC
Semtech
53.24
19.82
59.31%
SLAB
Silicon Laboratories
134.65
36.79
37.59%
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.