Allegro MicroSystems (NASDAQ:ALGM) Posts Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Allegro MicroSystems (NASDAQ:ALGM) posted its quarterly earnings results on Thursday. The company reported $0.15 EPS for the quarter, beating analysts’ consensus estimates of $0.14 by $0.01, FiscalAI reports. The company had revenue of $229.21 million during the quarter, compared to analyst estimates of $220.78 million. Allegro MicroSystems had a negative net margin of 1.57% and a positive return on equity of 4.35%. The firm’s revenue was up 28.9% compared to the same quarter last year. During the same period in the prior year, the business posted $0.07 EPS.

Here are the key takeaways from Allegro MicroSystems’ conference call:

• Beat guidance in Q3 with $229 million in sales and non-GAAP EPS of $0.15, while gross margin improved to 49.9% and EPS rose 114% year‑over‑year, highlighting strong operating leverage.
• Bookings and backlog reached multi‑quarter highs with significant design wins across ADAS, xEV, and data center, supporting future content and revenue upside.
• Data center became a record 10% of sales (up 31% sequentially); fan drivers are the current growth engine while higher‑margin current sensors and new SiC isolated gate drivers are ramping and being broadly sampled.
• Q4 guidance calls for $230M–$240M in sales and 49–51% gross margin (midpoint +22% YoY), but management expects automotive to be flat to slightly down (still ~20% below its prior peak), making near‑term mix a key risk.
• Balance sheet and cash generation remain healthy: Q3 free cash flow was $41 million (18% of sales), cash of $163 million, and the term loan was repriced lower to SOFR+175bps, with net leverage near 1x.

Allegro MicroSystems Stock Down 2.8%

Shares of NASDAQ:ALGM opened at $36.91 on Friday. The firm has a market capitalization of $6.83 billion, a P/E ratio of -461.38 and a beta of 1.61. The company has a debt-to-equity ratio of 0.30, a quick ratio of 2.48 and a current ratio of 3.65. The stock has a 50 day moving average price of $29.28 and a 200-day moving average price of $29.83. Allegro MicroSystems has a 52-week low of $16.38 and a 52-week high of $39.89.

Analyst Upgrades and Downgrades

Several equities analysts have recently commented on ALGM shares. UBS Group upped their price objective on shares of Allegro MicroSystems from $40.00 to $44.00 and gave the company a “buy” rating in a research note on Friday. Weiss Ratings restated a “sell (e+)” rating on shares of Allegro MicroSystems in a report on Monday, December 29th. Mizuho set a $38.00 price objective on Allegro MicroSystems in a report on Tuesday, December 16th. Evercore ISI lifted their price objective on Allegro MicroSystems from $37.00 to $49.00 and gave the stock an “outperform” rating in a research report on Friday, October 31st. Finally, Jefferies Financial Group upped their target price on Allegro MicroSystems from $37.00 to $43.00 and gave the company a “buy” rating in a report on Friday. Nine research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $43.50.

Hedge Funds Weigh In On Allegro MicroSystems

A number of institutional investors have recently added to or reduced their stakes in the company. NewEdge Advisors LLC boosted its holdings in shares of Allegro MicroSystems by 12,315.0% during the 3rd quarter. NewEdge Advisors LLC now owns 2,483 shares of the company’s stock valued at $73,000 after buying an additional 2,463 shares in the last quarter. Centaurus Financial Inc. bought a new stake in Allegro MicroSystems during the third quarter worth about $161,000. Canada Pension Plan Investment Board grew its holdings in Allegro MicroSystems by 154.2% in the second quarter. Canada Pension Plan Investment Board now owns 6,100 shares of the company’s stock worth $209,000 after purchasing an additional 3,700 shares during the period. Brooklyn Investment Group increased its stake in shares of Allegro MicroSystems by 321.6% during the third quarter. Brooklyn Investment Group now owns 7,335 shares of the company’s stock valued at $214,000 after purchasing an additional 5,595 shares in the last quarter. Finally, Mercer Global Advisors Inc. ADV purchased a new position in shares of Allegro MicroSystems during the third quarter valued at approximately $249,000. Institutional investors own 56.45% of the company’s stock.

Key Headlines Impacting Allegro MicroSystems

Here are the key news stories impacting Allegro MicroSystems this week:

• Positive Sentiment: Q3 results beat expectations — Allegro reported $0.15 EPS (vs. $0.14 consensus) and $229.2M revenue (vs. ~$220.8M), with revenue up ~29% YoY; management provided revenue and EPS guidance that supported a bullish near‑term outlook. GlobeNewswire: Q3 Results
• Positive Sentiment: Multiple analyst price‑target raises — TD Cowen, Wells Fargo, Morgan Stanley and Jefferies raised targets (examples: TD Cowen and Wells Fargo to $45; Jefferies to $43), signaling institutional support and providing fresh upside narratives for traders. Benzinga: Analyst Coverage The Fly: TD Cowen Raise
• Positive Sentiment: Shares briefly rallied to multi‑year highs on the swing to profitability and the stronger sales outlook, reflecting momentum buying after the print. MSN: Stock Jumps
• Neutral Sentiment: Company guidance is roughly in line with consensus (Q4 EPS guide $0.140–$0.18; revenue $230–240M), so while supportive, it wasn’t an unambiguous upside surprise that would guarantee further multiple expansion. MSN: Guidance Details
• Neutral Sentiment: Investors can review the company presentation and full earnings call transcript for detail on product mix and end‑market exposure (automotive still dominant; data center exposure cited as a growth catalyst). Seeking Alpha: Earnings Call Transcript
• Negative Sentiment: Valuation and earnings‑quality concerns — a Seeking Alpha piece warns Allegro is “pricing in green shoots” with a demanding multiple (~8x sales) and that adjusted EPS is inflated by significant stock‑based compensation, suggesting true cash earnings are lower. That note likely prompted some profit‑taking. Seeking Alpha: Valuation Caution

About Allegro MicroSystems

Allegro MicroSystems, Inc (NASDAQ: ALGM) is a leading designer and manufacturer of high-performance power and sensing integrated circuits. The company focuses on semiconductor solutions that enable precise motion control, energy-efficient power management and robust sensing in a wide range of applications. Allegro’s product portfolio includes Hall-effect magnetic sensors, current and position sensing ICs, motor driver and controller devices, and power management components.

Allegro MicroSystems serves major automotive, industrial and consumer markets worldwide.