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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on ALGM

Allegro MicroSystems' recent performance was driven by the introduction of new products, particularly power-sensing and gate-driver solutions for EVs and AI data centers. The company's expanded Power-Thru gate driver portfolio and ultra-low-loss isolated current sensor set new standards for efficiency in high-power systems. Additionally, the company's upcoming Analyst Day and third-quarter fiscal year 2026 financial results announcement may provide further insights into its growth prospects. Institutional investors, such as Sumitomo Mitsui Trust Group Inc., have also shown confidence in the company by increasing their stakes.

1.c. Company Highlights

2. Allegro MicroSystems Beats Expectations with Strong Q2 Results

Allegro MicroSystems delivered a strong second quarter with sales, gross margin, and EPS above the midpoint of their guidance ranges at $214 million, 49.6%, and $0.13, respectively. The EPS beat analysts' estimates of $0.12. The company's automotive sensor business grew through increased adoption of their ICs and xEV powertrain systems, while their data center sales grew, establishing a new quarterly record. The company expects third quarter sales to be in the range of $215 million to $225 million, representing a 24% year-over-year increase.

Publication Date: Nov -09

📋 Highlights
  • Q2 Sales & Profitability:: Revenue reached $214 million, gross margin hit 49.6%, and EPS was $0.13, all above guidance midpoints.
  • Automotive Growth Drivers:: E-mobility up 21% YoY, non-e-mobility up 12% YoY, with 8% QoQ growth in automotive sales overall.
  • Data Center Expansion:: Record sales in data center segment, with new high-voltage gate drivers for silicon carbide power supplies being sampled by leaders.
  • Q3 Guidance:: Revenue projected at $215–$225 million (24% YoY growth), EPS expected at $0.12–$0.16, exceeding seasonal trends.
  • Gross Margin Target:: 60–65% gross margin drop-through maintained, with long-term goal of 58% and near-term focus on returning to 50%.

Revenue Growth Drivers

The company's automotive business grew 8% quarter-over-quarter and 12% year-over-year, with e-mobility being a significant contributor, growing 21% year-over-year. According to Michael Doogue, "we are seeing growth in the e-mobility space as we would expect based on the strong activity we have through design wins in the e-mobility space." The data center business is also a growth driver, with the company sampling new high-voltage gate drivers for silicon carbide with market leaders in the data center power supply space.

Gross Margin Expansion

The company's gross margin expanded 60 basis points above expectations, driven by revenue growth and favorable product mix. Derek D'Antilio mentioned that the company is working to get back to their long-term gross margin target of 58%. The current gross margin is 49.6%, and the company expects to drive leverage, product mix, and efficiency improvements to achieve their target.

Valuation Metrics

Allegro MicroSystems' current valuation metrics indicate a P/E Ratio of -176.02, P/B Ratio of 5.28, and P/S Ratio of 6.33. Analysts estimate next year's revenue growth at 20.9%. The company's EV/EBITDA is 92.05, indicating a relatively high valuation. The ROE is -3.04%, and the ROIC is -0.56%, indicating room for improvement in profitability.

Outlook

The company is optimistic about their growth prospects, driven by the increasing adoption of their products in the automotive and data center markets. Michael Doogue mentioned that the company is seeing positive trends in data center architectures and is gaining market share. The company's guidance for the third quarter is above seasonal, indicating a strong growth trajectory. With a growing backlog and a book-to-bill ratio above 1, the company is well-positioned for future growth.

3. NewsRoom

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Allegro MicroSystems (ALGM) Upgraded to Buy: Here's Why

Feb -04

Source: zacks.com

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Allegro MicroSystems Appoints Ian Kent, Senior Vice President, Operations and Jamie Haas Vice President, Chief Technology Officer

Feb -03

Source: globenewswire.com

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Allegro MicroSystems Sees Industrials Leading Growth

Feb -02

Source: seekingalpha.com

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Allegro MicroSystems: Enthusiastically Pricing In Green Shoots

Jan -30

Source: seekingalpha.com

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Allegro MicroSystems (NASDAQ:ALGM) Reaches New 1-Year High After Strong Earnings

Jan -30

Source: defenseworld.net

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Allegro MicroSystems, Inc. (ALGM) Q3 2026 Earnings Call Transcript

Jan -29

Source: seekingalpha.com

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Allegro MicroSystems, Inc. (ALGM) Q3 Earnings and Revenues Beat Estimates

Jan -29

Source: zacks.com

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Allegro MicroSystems Reports Third Quarter 2026 Results

Jan -29

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Magnetic Sensors Integrated Circuits

Expected Growth: 8.5%

Growing demand for navigation and positioning systems in automotive and industrial applications, increasing adoption of IoT devices, and rising need for accurate and reliable sensing solutions drive the growth of Magnetic Sensors Integrated Circuits market.

Power Integrated Circuits

Expected Growth: 8.5%

Growing demand for energy-efficient solutions in automotive, industrial, and consumer applications drives the growth of Power Integrated Circuits. Increasing adoption of electric vehicles, renewable energy systems, and IoT devices fuels the market growth.

7. Detailed Products

Magnetic Sensors

Allegro MicroSystems' magnetic sensors are designed to detect changes in magnetic fields, providing accurate and reliable measurements for a wide range of applications.

Power ICs

Allegro MicroSystems' power ICs are designed to provide efficient power management and conversion for a variety of applications.

LED Drivers

Allegro MicroSystems' LED drivers are designed to provide efficient and reliable power management for LED lighting systems.

Motor Drivers

Allegro MicroSystems' motor drivers are designed to provide efficient and reliable control of DC and stepper motors.

Regulators

Allegro MicroSystems' regulators are designed to provide efficient and reliable voltage regulation for a variety of applications.

Switches and Multiplexers

Allegro MicroSystems' switches and multiplexers are designed to provide efficient and reliable signal switching and routing.

Current Sensors

Allegro MicroSystems' current sensors are designed to detect and measure current flow in a variety of applications.

8. Allegro MicroSystems, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Allegro MicroSystems, Inc. has a moderate threat of substitutes due to the availability of alternative products from competitors.

Bargaining Power Of Customers

Allegro MicroSystems, Inc. has a low bargaining power of customers due to its strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

Allegro MicroSystems, Inc. has a moderate bargaining power of suppliers due to the presence of multiple suppliers and moderate switching costs.

Threat Of New Entrants

Allegro MicroSystems, Inc. has a high threat of new entrants due to the attractiveness of the industry and low barriers to entry.

Intensity Of Rivalry

Allegro MicroSystems, Inc. operates in a highly competitive industry with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 18.63%
Debt Cost 4.98%
Equity Weight 81.37%
Equity Cost 12.57%
WACC 11.15%
Leverage 22.89%

11. Quality Control: Allegro MicroSystems, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Qorvo

A-Score: 4.4/10

Value: 3.8

Growth: 3.9

Quality: 5.6

Yield: 0.0

Momentum: 8.0

Volatility: 5.0

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SiTime

A-Score: 3.6/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

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Silicon Labs

A-Score: 3.4/10

Value: 4.6

Growth: 1.9

Quality: 2.8

Yield: 0.0

Momentum: 7.0

Volatility: 4.3

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Allegro MicroSystems

A-Score: 3.1/10

Value: 2.4

Growth: 1.6

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 3.7

1-Year Total Return ->

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IPG Photonics

A-Score: 3.0/10

Value: 1.7

Growth: 2.1

Quality: 4.1

Yield: 0.0

Momentum: 5.0

Volatility: 5.3

1-Year Total Return ->

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Power Integrations

A-Score: 2.7/10

Value: 1.6

Growth: 2.0

Quality: 5.6

Yield: 3.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

41.57$

Current Price

41.57$

Potential

-0.00%

Expected Cash-Flows