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Allegro MicroSystems
(NASDAQ:ALGM)
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Rating:58Neutral
Price Target:
$33.00
▼(-11.86% Downside)
Action:Reiterated
Date:10/08/26
The score is held back primarily by only mid-level financial performance (turnaround still incomplete with slightly negative net margin and declining free cash flow) and an unattractive valuation (very high P/E with no dividend support). Offsetting factors include a notably strong earnings-call outlook with upbeat guidance, improving margins, and solid demand signals, while technicals remain mixed with price still below key longer-term moving averages.
Positive Factors
Structural End-Market Growth
Exposure to expanding data-center power needs, electrification, ADAS, and robotics gives Allegro multiple durable growth avenues. These markets can increase semiconductor content per system and reduce reliance on any single end market over the next several quarters.
Negative Factors
Incomplete Profitability Turnaround
Revenue and operating results have recovered, but negative net margin and ROE show that the turnaround has not yet restored durable bottom-line profitability. Continued sensitivity to pricing, product mix, and operating costs could limit earnings resilience.
Read all positive and negative factors
Positive Factors
Negative Factors
Structural End-Market Growth
Exposure to expanding data-center power needs, electrification, ADAS, and robotics gives Allegro multiple durable growth avenues. These markets can increase semiconductor content per system and reduce reliance on any single end market over the next several quarters.
Read all positive factors
Allegro MicroSystems (ALGM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.89B
Dividend YieldN/A
Average Volume (3M)2.60M
Price to Earnings (P/E)390.4
Beta (1Y)1.90
Revenue Growth24.22%
EPS GrowthN/A
CountryUS
Employees4,250
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.08
Shares Outstanding186,402,040
10 Day Avg. Volume3,152,359
30 Day Avg. Volume2,596,178
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 Cap1.87
Enterprise Value/Revenue11.63
Enterprise Value/Gross Profit24.65
Enterprise Value/Ebitda105.94
Forecast
1Y Price Target
$52.43Price Target Upside40.03% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)1.03
Revenue Forecast (FY)$1.10B
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 MicroSystems makes money primarily by selling semiconductor integrated circuits that it designs and outsources to third-party foundries for wafer fabrication, then uses outsourced assembly/test partners to produce finished chips that are s...
Allegro MicroSystems Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call was strongly positive, supported by record revenue, substantial year-over-year EPS growth, expanding bookings and backlog, robust automotive and data center demand, major design wins, improving margins, and constructive second-quarter guidance. The principal challenges were back-end capacity constraints, low single-digit automotive contract pricing declines, inflationary cost headwinds, lumpy general industrial demand, and the timing of pricing benefits. Overall, the highlights significantly outweighed the lowlights.Positive Updates
Strong First-Quarter Revenue and EPS Growth
First-quarter sales were $259 million, above the high end of guidance, increasing 7% sequentially and 27% year-over-year. Non-GAAP EPS was $0.23, up 35% sequentially, more than 2.5x Q1 fiscal 2026, and 156% year-over-year.
Negative Updates
Orders Exceeding Current Ship Capacity
Some within-lead-time orders in automotive and data center could not be shipped during Q1, creating a backlog of delinquent orders expected to ship over the next couple of quarters. Management said the constraint is primarily in back-end capacity.
Read all updates
Q1-2027 Updates
Positive
Negative
Strong First-Quarter Revenue and EPS Growth
First-quarter sales were $259 million, above the high end of guidance, increasing 7% sequentially and 27% year-over-year. Non-GAAP EPS was $0.23, up 35% sequentially, more than 2.5x Q1 fiscal 2026, and 156% year-over-year.
Read all positive updates
Company Guidance
For fiscal Q2 2027, Allegro expects sales of $265 million-$275 million, with the midpoint equating to a 26% year-over-year increase; both auto and industrial are expected to deliver mid-single digit sequential growth, gross margin is expected to be between 50.75%-51.75%, operating expenses are expected to be $84.5 million, ±$1 million, interest expense is projected to be $4 million, the Non-GAAP tax rate is expected to be approximately 10%, weighted average diluted share count is estimated at 188 million shares, and Non-GAAP EPS is expected to be between $0.23-$0.26 per share, with the midpoint implying an 88% year-over-year increase. For fiscal 2027, data center sales are expected to more than double over fiscal 2026, robotics and automation are expected to contribute 3%-4% of sales, auto growth is targeted at greater than 10% through growth 7%-10% above SAAR, and the company expects to move towards a target gross margin of 55% and beyond; the expected duration to see material impact from isolated gate drivers in data center is 18 months-24 months, with about an 18-month expectation.Allegro MicroSystems Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
63
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 945.93M | 890.10M | 725.01M | 1.05B | 973.65M | 768.67M |
| Gross Profit | 446.44M | 412.64M | 321.53M | 574.53M | 546.08M | 407.46M |
| EBITDA | 103.88M | 86.08M | 9.17M | 276.94M | 264.49M | 191.77M |
| Net Income | 14.20M | -14.90M | -73.01M | 152.70M | 187.36M | 119.41M |
Balance Sheet | ||||||
| Total Assets | 1.41B | 1.42B | 1.42B | 1.53B | 1.18B | 892.62M |
| Cash, Cash Equivalents and Short-Term Investments | 162.03M | 168.75M | 121.33M | 212.14M | 351.58M | 282.38M |
| Total Debt | 287.16M | 287.28M | 368.49M | 275.21M | 42.54M | 41.45M |
| Total Liabilities | 446.00M | 459.73M | 489.86M | 398.89M | 214.34M | 157.26M |
| Stockholders Equity | 964.28M | 956.45M | 929.55M | 1.13B | 965.63M | 734.21M |
Cash Flow | ||||||
| Free Cash Flow | 88.32M | 124.89M | 21.96M | 56.94M | 113.43M | 86.19M |
| Operating Cash Flow | 123.91M | 163.07M | 61.91M | 181.72M | 193.21M | 156.13M |
| Investing Cash Flow | -39.13M | -41.72M | -40.82M | -516.72M | -99.70M | -66.27M |
| Financing Cash Flow | -51.18M | -77.38M | -112.06M | 198.88M | -20.00M | -5.31M |
Allegro MicroSystems Technical Analysis
Negative
37.44
Price Trends
36.87
Negative
43.92
Negative
40.69
Negative
Market Momentum
-1.16
Positive
32.16
Neutral
12.92
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 37.44 is above the 20-day moving average (MA) of 35.68, above the 50-day MA of 36.87, and below the 200-day MA of 40.69, indicating a bearish trend. The MACD of -1.16 indicates Positive momentum. The RSI at 32.16 is Neutral, neither overbought nor oversold. The STOCH value of 12.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $191.62B | 46.69 | 12.26% | 1.08% | 33.65% | 114.59% | |
72 Outperform | $57.83B | 19.47 | 28.05% | 1.77% | 8.77% | 39.24% | |
71 Outperform | $252.49B | 41.83 | 35.77% | 2.05% | 16.66% | 20.14% | |
68 Neutral | $28.04B | 45.58 | 8.38% | ― | -3.14% | 44.55% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $5.89B | 390.37 | 1.48% | ― | 24.22% | ― | |
56 Neutral | $41.27B | 88.02 | 2.66% | 0.79% | 10.06% | -27.68% |
* Technology Sector Average
ALGM
Allegro MicroSystems
31.62
1.13
3.71%
ADI
Analog Devices
395.44
152.26
62.61%
NXPI
NXP Semiconductors
229.33
13.33
6.17%
ON
ON Semiconductor
72.02
17.13
31.21%
STM
STMicroelectronics
45.39
15.41
51.42%
TXN
Texas Instruments
276.48
101.43
57.94%
Allegro MicroSystems Corporate Events
Executive/Board ChangesShareholder Meetings
Allegro MicroSystems Shareholders Back Governance and Board Slate
Positive
Aug 7, 2026
On August 5, 2026, Allegro MicroSystems, Inc. held its Annual Meeting of Shareholders, where investors voted on director elections, auditor ratification and executive compensation. Shareholders elected Jennie M. Raubacher, Brian C. White and Rober...
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.