Download PDF

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.

Show Full description

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' Q3 FY2026 Earnings: A Strong Performance

Allegro MicroSystems reported net sales of $229 million for the third quarter of fiscal 2026, representing a 7% sequential increase and a 29% year-over-year growth. The company's non-GAAP earnings per share (EPS) came in at $0.15, beating estimates of $0.14. Gross margin stood at 49.9%, while operating margin was 15.4%, and adjusted EBITDA margin was 20.1% of sales. The strong performance was driven by growth in e-mobility, ADAS, and data center businesses.

Publication Date: Feb -08

📋 Highlights
  • Revenue Growth:: Q3 net sales of $229 million, up 7% sequentially and 29% YoY, driven by e-mobility, ADAS, and data center demand.
  • Margin Performance:: Gross margin held at 49.9%, with adjusted EBITDA at 20.1% of sales, reflecting operational efficiency and pricing discipline.
  • Data Center Momentum:: Industrial sales grew 11% sequentially, with data center expected to grow at a 20%+ CAGR, fueled by fan drivers and current sensors.
  • Product Innovation:: Launched first silicon carbide isolated gate driver IC, targeting high-growth electrification markets with $5 billion e-mobility segment potential.
  • Liquidity & Guidance:: Ended with $163 million cash ($6M/quarter liquidity), and Q4 sales guidance of $230–240 million, with stable gross margin at 49–51%.

Segmental Performance

Automotive sales grew 6% sequentially and 28% year over year, while industrial and other sales increased 11% sequentially and 31% year over year. The data center business, in particular, is expected to continue growing, driven by demand for fan drivers, current sensors, and isolated gate drivers. The company's recent release of its first isolated gate driver IC for silicon carbide transistors is expected to drive future growth.

Guidance and Outlook

The company expects fourth-quarter sales to be between $230 and $240 million, with a non-GAAP gross margin of 49-51%. Operating expenses are expected to increase by approximately 3% sequentially. Non-GAAP EPS is expected to be between $0.14 and $0.18 per share. Analysts estimate next year's revenue growth at 18.8%, indicating a positive outlook for the company.

Valuation Metrics

Allegro MicroSystems' current valuation metrics indicate a high growth expectation. The stock has a P/E Ratio of -582.75, P/B Ratio of 7.98, and P/S Ratio of 9.17. The EV/EBITDA ratio stands at 133.31. These metrics suggest that the market has high expectations for the company's future growth.

Growth Drivers

The company's growth drivers include e-mobility, ADAS, and data center businesses. The data center business is expected to grow at a CAGR of over 20% in the short term, driven by increasing demand for its products. The company's unique technologies and dollar content expansion are expected to drive growth in these areas.

Financial Health

Allegro MicroSystems reported a strong financial position, with $163 million in cash and an untapped line of credit for $256 million. The company plans to continue balancing liquidity with debt repayment, with a net leverage ratio slightly below 1:1. The company's ability to manage its finances effectively is expected to support its growth plans.

3. NewsRoom

Card image cap

Allegro MicroSystems Expands Current Sensing Leadership with Industry's Highest Accuracy Magnetic Current Sensor

Feb -10

Source: globenewswire.com

Card image cap

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

Feb -04

Source: zacks.com

Card image cap

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

Feb -03

Source: globenewswire.com

Card image cap

Allegro MicroSystems Sees Industrials Leading Growth

Feb -02

Source: seekingalpha.com

Card image cap

Allegro MicroSystems: Enthusiastically Pricing In Green Shoots

Jan -30

Source: seekingalpha.com

Card image cap

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

Jan -30

Source: defenseworld.net

Card image cap

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

Jan -29

Source: seekingalpha.com

Card image cap

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

Jan -29

Source: zacks.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

Stock-Card
Qorvo

A-Score: 4.4/10

Value: 3.8

Growth: 3.9

Quality: 5.6

Yield: 0.0

Momentum: 8.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
SiTime

A-Score: 3.6/10

Value: 6.2

Growth: 2.4

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.7

1-Year Total Return ->

View Full Report
Stock-Card
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

1-Year Total Return ->

View Full Report
Stock-Card
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 ->

View Full Report
Stock-Card
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 ->

View Full Report
Stock-Card
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 ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

42.38$

Current Price

42.38$

Potential

-0.00%

Expected Cash-Flows