Allegro MicroSystems (ALGM) AI Stock Analysis

• Market Cap: $5.81B
• Dividend Yield: N/A
• Average Volume (3M): 2.42M
• Price to Earnings (P/E): 149.9
• Beta (1Y): 1.85
• Revenue Growth: -7.23%
• EPS Growth: -15.69%
• Country: US
• Employees: 4,593
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.15
• Shares Outstanding: 185,290,860
• 10 Day Avg. Volume: 1,738,640
• 30 Day Avg. Volume: 2,415,493
• PEG Ratio: 0.43
• Price to Book (P/B): 5.02
• Price to Sales (P/S): 6.44
• P/FCF Ratio: 212.51
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 7.26
• Enterprise Value/Gross Profit: 16.16
• Enterprise Value/Ebitda: 103.43
• 1Y Price Target: $45.40
• Price Target Upside: 44.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.53
• Revenue Forecast (FY): $882.88M

• Rating: 66 Neutral
• Price Target: $34.00 ▲(8.35% Upside)
• Action: Reiterated Date: 01/30/26
• Date: Action: Reiterated 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

Product innovation — new current sensor and isolated SiC gate driver

Allegro’s new compact 200A current sensor (claims up to 90% cut in power losses) and first isolated SiC gate driver broaden addressable end markets (EV inverters, onboard charging, data center power). These differentiated components increase content per system and support multi-year secular growth and margin recovery as adoption scales.

Improved cash generation and liquidity

Material improvement in operating cash flow and FCF provides a durable buffer while earnings recover, funding R&D, sample ramps and capex without immediate refinancing. A healthy cash balance plus untapped credit reduces liquidity risk and supports execution on multi‑quarter product ramps and design-win conversion.

Strong design wins, bookings and backlog across strategic markets

Sustained design wins and rising backlog in automotive, eMobility, data center and robotics create multi‑year revenue visibility and stickier customer relationships. Successful design conversions raise long‑term content per platform, support scale benefits, and make revenue growth less cyclical as products move from sampling into production.

Negative Factors

Profitability remains negative

Despite topline stabilization and mid‑40% gross margins, trailing results show net losses which compress returns and limit retained earnings. Persistent negative net income constrains internal funding for growth, increases reliance on external financing, and must normalize for sustained credit strength and shareholder returns.

Concentrated China exposure and ASP pressure

A ~30% share of ship‑to sales in China plus management’s expectation of low single‑digit ASP declines creates structural margin risk and regional demand concentration. Geopolitical, regulatory or localized demand swings in China could materially impact revenue and margins, limiting resilience across macro scenarios.

Margins below prior peak and OpEx step‑ups

Gross margin improvement is meaningful but still under prior mid‑50s highs; management cites need for mix, volume and supplier cost reductions to regain peak margins. Near‑term OpEx increases (variable comp, payroll tax resets) also pressure operating leverage, making margin recovery dependent on sustained volume and cost actions.

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 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 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 generated from unit shipments of its IC products, with pricing typically tied to product type, performance, and volume commitments. Key revenue streams include (1) magnetic sensing ICs—such as current sensors used for power monitoring/control and position/angle sensors used for motor commutation and motion feedback—and (2) power ICs—such as motor drivers and related power-management devices used to control electric motors and manage power delivery. A significant driver of demand is exposure to automotive electrification and advanced safety features, where increasing electronic content per vehicle can expand dollar content per platform. Material factors that influence earnings include customer program wins and production ramps (especially in automotive), long product lifecycles and qualification requirements in automotive/industrial markets, and the company’s ability to secure wafer fabrication and assembly/test capacity through manufacturing partners and supply agreements. Specific named partnerships or customer concentrations: null.

Allegro MicroSystems Financial Statement Overview

Summary

Mixed fundamentals: modest TTM revenue growth and a manageable balance sheet, supported by improved TTM operating and free cash flow. However, profitability is currently weak and volatile with TTM and FY2025 net losses, making the earnings recovery the key swing factor.

Income Statement

TTM (Trailing-Twelve-Months) revenue rose 6.5% and gross margin held roughly steady around the mid‑40% range, showing reasonable product/price resilience. However, profitability remains the key issue: net income is still negative in TTM and the annual 2025 period also showed a meaningful loss, a sharp reversal from strong profits in 2022–2024. Overall, the top line has stabilized, but the earnings profile is currently weak and volatile.

Balance Sheet

Leverage looks manageable with debt at ~0.30x equity in TTM, improved from the annual 2025 level (~0.40x), and equity remains sizable versus the asset base. The main concern is returns: equity returns are negative in TTM and annual 2025, reflecting the recent loss cycle (despite healthy positive returns in 2022–2024). Balance sheet risk appears contained, but profitability needs to normalize to fully support credit quality and valuation.

Cash Flow

Cash generation improved materially in TTM, with operating cash flow of ~$148M and free cash flow of ~$121M, sharply higher than annual 2025 levels. That said, cash conversion is not consistently strong across periods and the company’s recent earnings losses create a mismatch where cash flow strength may be timing-driven. Still, the current TTM free cash flow performance provides a meaningful cushion while the income statement recovers.

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

• Technical Analysis Sentiment: Negative
• Last Price: 31.38
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 31.38 is below the 20-day moving average (MA) of 35.36, below the 50-day MA of 35.21, and above the 200-day MA of 31.26, indicating a neutral trend. The MACD of -1.41 indicates Positive momentum. The RSI at 35.49 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALGM.

Allegro MicroSystems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRUS	83 Outperform	$6.90B	10.99	20.13%	―	2.19%	19.22%
SMTC	69 Neutral	$8.24B	-541.20	4.89%	―	20.60%	―
AMKR	68 Neutral	$11.04B	26.10	8.73%	0.81%	0.13%	-16.17%
SITM	67 Neutral	$8.99B	―	-4.23%	―	59.04%	28.50%
ALGM	66 Neutral	$5.81B	149.88	-1.40%	―	-7.23%	-15.69%
SLAB	65 Neutral	$6.75B	―	-6.05%	―	47.10%	64.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Allegro MicroSystems Corporate Events

Allegro MicroSystems Adds New Term Loan Tranche

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, cover related fees and expenses, and support general corporate purposes. The new term loans, which carry no annual amortization and offer the company a choice between a Term SOFR-based rate plus 1.75% or a floating base rate plus 0.75%, effectively extend the company’s debt maturities and may improve financial flexibility by locking in longer-term financing and preserving cash flow, with implications for its capital structure and future borrowing capacity.

The most recent analyst rating on (ALGM) stock is a Buy with a $39.00 price target. To see the full list of analyst forecasts on Allegro MicroSystems stock, see the ALGM Stock Forecast page.

Allegro MicroSystems Announces New Term Loan Refinancing

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 rate or 0.75% over the base rate. The company plans to use the proceeds to fully refinance its existing term loans, in a move that could lower its borrowing costs and extend debt maturities, though the refinancing remains subject to customary closing conditions and may not be completed on the terms described or at all, with final terms to be disclosed once the transaction closes.

The most recent analyst rating on (ALGM) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on Allegro MicroSystems stock, see the ALGM Stock Forecast page.