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Allegro MicroSystems
(NASDAQ:ALGM)
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Rating:69Neutral
Price Target:
$73.00
▲(82.50% Upside)
Action:Downgraded
Date:06/30/26
ALGM’s score is driven primarily by improving fundamentals and especially strong cash generation, reinforced by a positive earnings call with upbeat growth and margin guidance plus continued deleveraging. Offsetting these positives are still-weak (slightly negative) TTM earnings and limited technical visibility, while valuation is constrained by a deeply negative P/E and no provided dividend yield.
Positive Factors
Strong free cash flow generation
Sustained free cash flow and robust operating cash generation provide durable internal funding for R&D, qualification cycles, capital spending and debt reduction. This strengthens the firm's financial flexibility to invest in long design‑in periods and to absorb cyclicality in automotive demand over the next 2–6 months.
Negative Factors
High automotive revenue concentration
Heavy reliance on automotive (71% of revenue) leaves results sensitive to OEM production cycles, model timing, and price negotiations. Even with electrification driving content per vehicle, concentrated end‑market exposure increases vulnerability to demand swings and contract timing over the coming 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Sustained free cash flow and robust operating cash generation provide durable internal funding for R&D, qualification cycles, capital spending and debt reduction. This strengthens the firm's financial flexibility to invest in long design‑in periods and to absorb cyclicality in automotive demand over the next 2–6 months.
Read all positive factors
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.97B
Dividend YieldN/A
Average Volume (3M)2.62M
Price to Earnings (P/E)―
Beta (1Y)1.96
Revenue Growth22.77%
EPS Growth79.17%
CountryUS
Employees4,593
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.08
Shares Outstanding186,309,070
10 Day Avg. Volume2,556,553
30 Day Avg. Volume2,624,855
Financial Highlights & Ratios
PEG Ratio4.71
Price to Book (P/B)5.84
Price to Sales (P/S)6.27
P/FCF Ratio44.69
Enterprise Value/Market Cap0.78
Enterprise Value/Revenue11.43
Enterprise Value/Gross Profit24.68
Enterprise Value/Ebitda130.75
Forecast
1Y Price Target
$58.25Price Target Upside45.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)0.99
Revenue Forecast (FY)$1.06B
Allegro MicroSystems Business Overview & Revenue Model
Company Description
Allegro MicroSystems, Inc. focuses on the creation, production, and worldwide distribution of sophisticated integrated circuits (ICs). Their primary offerings consist of sensor ICs and custom-designed analog power ICs, developed mainly for motion ...
How the Company Makes Money
Allegro makes money primarily by selling its semiconductor integrated circuits (ICs) to original equipment manufacturers (OEMs) and to automotive and industrial tier suppliers that incorporate these chips into end products and subsystems. Revenue ...
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call conveyed materially positive operating momentum: broad-based revenue growth (23% FY), expanding design wins and backlog, record free cash flow, and margin improvement despite commodity headwinds. Management acknowledged cost pressures (notably gold, fuel/freight) and seasonality-driven effects in China and pricing negotiations, and some new product revenue is back-end loaded. On balance, the scale and durability of revenue, margin progress, and cash generation outweigh the manageable near-term headwinds.Positive Updates
Consistent Revenue and EPS Growth
Q4 sales of $243M (5th consecutive quarter of sales growth), Q4 non-GAAP EPS $0.17 (nearly 3x YoY). Fiscal 2026 sales $890M, up 23% YoY; FY26 non-GAAP EPS $0.54, more than doubled YoY.
Negative Updates
Commodity and Cost Headwinds
Cost of gold was an ~200 bps headwind to gross margin in FY26; recent increases in fuel and freight have also pressured costs. Management indicated selective price increases will begin end of Q1 to offset some costs.
Read all updates
Q4-2026 Updates
Positive
Negative
Consistent Revenue and EPS Growth
Q4 sales of $243M (5th consecutive quarter of sales growth), Q4 non-GAAP EPS $0.17 (nearly 3x YoY). Fiscal 2026 sales $890M, up 23% YoY; FY26 non-GAAP EPS $0.54, more than doubled YoY.
Read all positive updates
Company Guidance
For Q1 FY2027 Allegro guided non‑GAAP sales of $245–$255 million (midpoint ≈ 23% year‑over‑year growth), non‑GAAP gross margin of 50–51% (management noted drop‑through into Q1 is closer to ~70%), operating expenses of $80 million ± $2 million (a sequential decline), interest expense of about $4 million, a non‑GAAP tax rate of ~9% and a weighted average diluted share count of ~187 million, implying non‑GAAP EPS of $0.19–$0.23; management also said these results assume continued strategic R&D and sales investments funded largely through reallocation and process efficiencies, with data center strength and a modest auto uptick supporting the outlook.Allegro MicroSystems Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
72
Positive
Cash Flow
81
Very Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 890.10M | 725.01M | 1.05B | 973.65M | 768.67M |
| Gross Profit | 412.64M | 321.53M | 574.53M | 546.08M | 407.46M |
| EBITDA | 86.08M | 9.17M | 276.94M | 264.49M | 191.77M |
| Net Income | -14.90M | -73.01M | 152.70M | 187.36M | 119.41M |
Balance Sheet | |||||
| Total Assets | 1.42B | 1.42B | 1.53B | 1.18B | 892.62M |
| Cash, Cash Equivalents and Short-Term Investments | 168.75M | 121.33M | 212.14M | 351.58M | 282.38M |
| Total Debt | 287.28M | 368.49M | 275.21M | 42.54M | 41.45M |
| Total Liabilities | 459.73M | 489.86M | 398.89M | 214.34M | 157.26M |
| Stockholders Equity | 956.45M | 929.55M | 1.13B | 965.63M | 734.21M |
Cash Flow | |||||
| Free Cash Flow | 124.89M | 21.96M | 56.94M | 113.43M | 86.19M |
| Operating Cash Flow | 163.07M | 61.91M | 181.72M | 193.21M | 156.13M |
| Investing Cash Flow | -41.72M | -40.82M | -516.72M | -99.70M | -66.27M |
| Financing Cash Flow | -77.38M | -112.06M | 198.88M | -20.00M | -5.31M |
Allegro MicroSystems Technical Analysis
Positive
40.00
Price Trends
49.33
Positive
42.41
Positive
35.80
Positive
Market Momentum
4.59
Negative
69.46
Neutral
79.89
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 40 is below the 20-day moving average (MA) of 54.45, below the 50-day MA of 49.33, and above the 200-day MA of 35.80, indicating a bullish trend. The MACD of 4.59 indicates Negative momentum. The RSI at 69.46 is Neutral, neither overbought nor oversold. The STOCH value of 79.89 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 40 risk factors in its most recent earnings report. Allegro MicroSystems reported the most risks in the "Finance & Corporate" 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 | $7.49B | 18.38 | 20.21% | ― | 5.34% | 29.84% | |
77 Outperform | $19.68B | -754.86 | -2.15% | ― | 65.19% | 73.74% | |
70 Outperform | $21.37B | 49.37 | 9.96% | 0.81% | 12.71% | 37.49% | |
69 Neutral | $12.97B | -883.53 | -1.57% | ― | 22.77% | 79.17% | |
68 Neutral | $15.08B | -437.67 | -5.93% | ― | 14.22% | 81.01% | |
65 Neutral | $7.21B | -142.29 | -4.66% | ― | 25.14% | 70.00% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
ALGM
Allegro MicroSystems
69.62
33.90
94.90%
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SLAB
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SITM
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745.56
536.20
256.11%
Allegro MicroSystems Corporate Events
Business Operations and StrategyExecutive/Board Changes
Allegro MicroSystems Appoints Brian White to Board
Positive
Jun 18, 2026
On June 17, 2026, Allegro MicroSystems expanded its board to 11 members and appointed veteran semiconductor executive Brian C. White as an independent Class III director, with a term running until the 2026 annual meeting of shareholders. The board...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Allegro MicroSystems Strengthens Board with New Independent Director
Positive
May 13, 2026
On May 11 and May 13, 2026, Allegro MicroSystems directors Susan D. Lynch and Richard R. Lury informed the board that they would not stand for reelection as Class III directors at the August 5, 2026 annual meeting, with their service ending immedi...
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.