Analyst Quinn Bolton of Needham reiterated a Buy rating on Allegro MicroSystems, retaining the price target of $37.00.
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Quinn Bolton has given his Buy rating due to a combination of factors including Allegro MicroSystems’ strong performance in the automotive sector and data center market. The company reported a slight increase in revenue and earnings per share, largely driven by these sectors, with data center revenue reaching a quarterly high due to demand for cooling fans.
Additionally, the demand environment is robust, with bookings and backlog at multi-year highs and a book-to-bill ratio greater than 1.0 projected for all of 2025. Allegro is also nearing the end of its inventory correction phase, with no significant inventory reductions expected beyond the third fiscal quarter of 2026. Despite anticipated moderate price declines in 2026, the company’s performance and strategic positioning support the Buy rating, with a price target of $37 based on a 31x multiple of the projected 2027 non-GAAP earnings per share.
Bolton covers the Technology sector, focusing on stocks such as Monolithic Power, IonQ, and Applied Materials. According to TipRanks, Bolton has an average return of 36.6% and a 59.41% success rate on recommended stocks.
In another report released on October 20, UBS also maintained a Buy rating on the stock with a $42.00 price target.