Allegro MicroSystems (NASDAQ:ALGM) Issues Earnings Results

Allegro MicroSystems (NASDAQ:ALGM) announced its quarterly earnings results on Thursday. The company reported $0.26 EPS for the quarter, topping the consensus estimate of $0.24 by $0.02, FiscalAI reports. The business had revenue of $276.88 million for the quarter, compared to analyst estimates of $270.86 million. Allegro MicroSystems had a return on equity of 8.30% and a net margin of 1.50%. The company’s quarterly revenue was up 29.2% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.13 EPS.

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

• Strong Q2 performance: Sales rose 29% year over year to $277 million, exceeding the high end of guidance, while non-GAAP EPS doubled to $0.26. Allegro reported its seventh consecutive quarter of sequential sales growth.
• Demand indicators remain robust: Design wins increased nearly 40% year over year, bookings rose 45%, and backlog expanded across automotive and industrial markets. Management said these trends put the company ahead of its mid-teens long-term sales growth target.
• Data center growth opportunity is expanding: Data center sales reached a record $46 million, up more than 150% year over year, with more than 10 new current-sensor wins for hyperscaler power systems. Management expects fiscal 2027 data center revenue to more than double, although some 800-volt programs were pushed out by one or two quarters.
• Automotive and robotics momentum is strong: Automotive sales grew 11% year over year, with more than 75% of new automotive design wins in xEV and ADAS applications. Allegro also secured humanoid robotics wins, including a program requiring approximately 60 ICs per robot, and will begin sampling an integrated sensor and motor-driver chip for robotic hands in fiscal Q3.
• Capacity and cost pressures remain: Back-end test capacity is beginning to tighten, prompting additional capacity investments in fiscal Q3 and Q4, while wafer supply remains adequate. Input costs, including wafer, energy, labor, and commodities, continue to rise, though pricing actions, manufacturing efficiencies, and operating leverage are expected to support gross-margin expansion toward the company’s greater-than-55% target.

Allegro MicroSystems Price Performance

Allegro MicroSystems stock traded down $4.11 during mid-day trading on Thursday, hitting $31.26. 2,891,401 shares of the company were exchanged, compared to its average volume of 2,620,969. Allegro MicroSystems has a 12-month low of $22.41 and a 12-month high of $71.77. The company has a market capitalization of $5.83 billion, a P/E ratio of 524.54, a PEG ratio of 0.99 and a beta of 1.99. The business’s 50 day simple moving average is $35.33 and its two-hundred day simple moving average is $40.65. The company has a debt-to-equity ratio of 0.30, a current ratio of 3.70 and a quick ratio of 2.33.

Analyst Ratings Changes

Several equities analysts recently issued reports on ALGM shares. Morgan Stanley lifted their price objective on Allegro MicroSystems from $51.00 to $52.00 and gave the stock an “overweight” rating in a report on Friday, July 31st. Barclays cut Allegro MicroSystems from an “overweight” rating to an “equal weight” rating and set a $48.00 price target for the company. in a research report on Monday, July 20th. Mizuho dropped their price target on Allegro MicroSystems from $67.00 to $58.00 and set an “outperform” rating for the company in a research report on Friday, July 31st. Wall Street Zen raised Allegro MicroSystems from a “hold” rating to a “buy” rating in a research note on Sunday, August 2nd. Finally, Needham & Company LLC increased their price objective on shares of Allegro MicroSystems from $55.00 to $57.00 and gave the company a “buy” rating in a research note on Thursday, July 30th. One research analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, Allegro MicroSystems currently has a consensus rating of “Moderate Buy” and a consensus price target of $51.58.

Insider Activity

In related news, SVP Erin Hagen sold 2,285 shares of the stock in a transaction on Monday, August 10th. The stock was sold at an average price of $44.39, for a total transaction of $101,431.15. Following the sale, the senior vice president owned 31,052 shares of the company’s stock, valued at $1,378,398.28. This trade represents a 6.85% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. 0.50% of the stock is owned by corporate insiders.

Allegro MicroSystems Company Profile

Allegro MicroSystems, Inc is a semiconductor company that develops and manufactures magnetic sensing and power-management solutions. Its products are designed to help monitor motion, position, speed, current and temperature, as well as control power in electronic systems.

The company’s portfolio includes Hall-effect and other magnetic sensors, current sensors, motor drivers, regulators, LED drivers and related integrated circuits. These products are used in automotive applications such as advanced driver-assistance systems, vehicle electrification, powertrain systems, comfort features and safety systems, as well as in industrial and consumer equipment.

Founded in 1990 and headquartered in Manchester, New Hampshire, Allegro serves customers globally through its international operations and distribution network.