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Allegro MicroSystems (ALGM)
NASDAQ:ALGM
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Allegro MicroSystems
(NASDAQ:ALGM)
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Rating:52Neutral
Price Target:
$26.00
▼(-16.93% Downside)
Allegro MicroSystems' overall stock score reflects a challenging financial environment with profitability issues, despite positive revenue and cash flow trends. The technical analysis indicates bearish momentum, and valuation metrics are weak due to negative earnings. However, strong earnings call results, particularly in automotive and data center segments, provide some optimism for future growth.
Positive Factors
Automotive Segment Growth
The growth in automotive sales, particularly in e-mobility, indicates strong demand and positions Allegro well in the expanding electric vehicle market.
New Product Innovation
This innovation enhances Allegro's competitive edge in high-voltage power systems, crucial for electric vehicles and AI data centers, supporting long-term growth.
Strong Design Wins
Securing major design wins strengthens Allegro's market position and ensures a steady revenue stream from key sectors like automotive and data centers.
Negative Factors
Declining Revenue Growth
A decline in revenue growth can hinder Allegro's ability to invest in R&D and innovation, impacting its competitive position over time.
Higher Operating Expenses
Rising operating expenses can pressure margins and reduce profitability, affecting Allegro's financial health and investment capacity.
Challenges in Europe
Persistent challenges in the European market could limit Allegro's growth potential and diversification efforts, impacting overall revenue stability.
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.79B
Dividend YieldN/A
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)1.86
Revenue Growth-7.23%
EPS Growth-15.69%
CountryUS
Employees4,593
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.13
Shares Outstanding185,119,050
10 Day Avg. Volume1,394,750
30 Day Avg. Volume1,748,366
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 Cap0.99
Enterprise Value/Revenue7.25
Enterprise Value/Gross Profit16.23
Enterprise Value/Ebitda101.98
Forecast
1Y Price Target
$38.50Price Target Upside23.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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, including integrated circuits and magnetic sensors. The company's revenue model is driven by a combination of direct sales to original equipment manufacturers (OEMs) and distribution partners. Key revenue streams include automotive applications, where demand for electric vehicle components is rapidly growing, as well as industrial automation and consumer electronics. Allegro often engages in strategic partnerships with technology firms and automotive manufacturers to integrate its solutions into their products, enhancing its market presence and driving sales. Additionally, the company benefits from ongoing trends toward electrification and automation, which contribute to increased demand for its advanced semiconductor technologies.
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:Oct 30, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jan 29, 2026
Earnings Call Sentiment Positive
Allegro MicroSystems demonstrated strong performance in the automotive and data center segments, achieving record sales and significant design wins. However, challenges persist in the broad-based industrial sector and European market, alongside increased operating expenses.Q2-2026 Updates
Positive Updates
Strong Q2 2026 Results
Allegro MicroSystems reported net sales of $214 million and non-GAAP EPS of $0.13, with a gross margin of 49.6%, exceeding the midpoint of guidance ranges.
Automotive Segment Growth
Automotive sales increased by 8% sequentially and 12% year-over-year, with e-mobility sales up by 21% year-over-year.
Data Center Segment Performance
Data center sales reached a new quarterly record, driven by server power architecture upgrades for AI workloads and increased sales of data center fan driver ICs and high-speed current sensor ICs.
Strong Design Wins
Allegro secured significant design wins in automotive, data center, and robotics applications, including ADAS and xEV systems in China and North America.
New Product Innovation
Introduction of the industry's first 10 megahertz TMR current sensor, enhancing Allegro's competitive advantage in high-voltage power systems.
Geographical Sales Growth
Sales increased in all regions except Europe, with notable growth in the Americas and China.
Negative Updates
Broad-Based Industrial Decline
Industrial and other sales declined by 1% sequentially, with continued inventory burn in broad-based industrial markets.
Challenges in Europe
Sales in Europe experienced seasonal declines, indicating persistent regional challenges.
Higher Operating Expenses
Operating expenses were $76 million, $3 million above outlook, due to increased variable compensation and weakening of the U.S. dollar.
Company Guidance
During Allegro MicroSystems' second-quarter earnings call for fiscal year 2026, the company reported strong financial performance with sales reaching $214 million, exceeding the midpoint of their guidance. They achieved a gross margin of 49.6% and an EPS of $0.13, demonstrating significant growth compared to the previous year. The company saw a 5% sequential and 14% year-over-year increase in total sales, driven by an 8% sequential and 12% year-over-year growth in automotive sales, with e-Mobility sales up 21% year-over-year. Data center sales set a new quarterly record, contributing to a 23% year-over-year increase in industrial and other sales. Looking forward, Allegro expects third-quarter sales to range between $215 million and $225 million, with a projected gross margin between 49% and 51%, driven by continued strength in automotive and data center markets.Allegro MicroSystems Financial Statement Overview
Summary
Allegro MicroSystems faces financial challenges 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.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.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.| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 788.39M | 725.01M | 1.05B | 973.65M | 768.67M | 591.21M |
| Gross Profit | 352.43M | 321.53M | 574.53M | 546.08M | 407.46M | 278.90M |
| EBITDA | 56.08M | 9.17M | 276.94M | 264.49M | 191.77M | 50.68M |
| Net Income | -28.37M | -73.01M | 152.70M | 187.36M | 119.41M | 17.95M |
Balance Sheet | ||||||
| Total Assets | 1.38B | 1.42B | 1.53B | 1.18B | 892.62M | 747.68M |
| Cash, Cash Equivalents and Short-Term Investments | 117.49M | 121.33M | 212.14M | 351.58M | 282.38M | 197.21M |
| Total Debt | 287.69M | 368.49M | 275.21M | 42.54M | 41.45M | 25.00M |
| Total Liabilities | 438.50M | 489.86M | 398.89M | 214.34M | 157.26M | 160.81M |
| Stockholders Equity | 945.83M | 929.55M | 1.13B | 965.63M | 734.21M | 585.75M |
Cash Flow | ||||||
| Free Cash Flow | 58.10M | 21.96M | 56.94M | 113.43M | 86.19M | 79.90M |
| Operating Cash Flow | 94.15M | 61.91M | 181.72M | 193.21M | 156.13M | 120.57M |
| Investing Cash Flow | -36.91M | -40.82M | -516.72M | -99.70M | -66.27M | -68.25M |
| Financing Cash Flow | -129.48M | -112.06M | 198.88M | -20.00M | -5.31M | -72.19M |
Allegro MicroSystems Technical Analysis
Positive
31.30
Price Trends
27.21
Positive
28.61
Positive
28.27
Positive
Market Momentum
0.78
Negative
67.05
Neutral
80.27
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 31.3 is above the 20-day moving average (MA) of 27.65, above the 50-day MA of 27.21, and above the 200-day MA of 28.27, indicating a bullish trend. The MACD of 0.78 indicates Negative momentum. The RSI at 67.05 is Neutral, neither overbought nor oversold. The STOCH value of 80.27 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $6.27B | 17.45 | 19.12% | ― | 2.19% | 19.22% | |
69 Neutral | $12.61B | 42.14 | 7.27% | 0.81% | 0.13% | -16.17% | |
69 Neutral | $7.04B | 237.31 | 13.39% | ― | 20.60% | ― | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $8.69B | -112.45 | -7.88% | ― | 59.04% | 28.50% | |
56 Neutral | $4.83B | -55.57 | -8.00% | ― | 47.10% | 64.29% | |
52 Neutral | $5.79B | -202.85 | -3.02% | ― | -7.23% | -15.69% |
* Technology Sector Average
ALGM
Allegro MicroSystems
31.30
8.34
36.32%
AMKR
Amkor
51.00
25.78
102.22%
CRUS
Cirrus Logic
122.82
21.68
21.44%
SMTC
Semtech
72.19
6.04
9.13%
SLAB
Silicon Laboratories
146.90
13.81
10.38%
SITM
SiTime Corporation
333.10
101.72
43.96%
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.