Allegro MicroSystems (NASDAQ:ALGM) Announces Quarterly Earnings Results, Beats Estimates By $0.02 EPS

Allegro MicroSystems (NASDAQ:ALGM) issued its earnings results on Thursday. The company reported $0.26 EPS for the quarter, beating analysts’ consensus estimates of $0.24 by $0.02, FiscalAI reports. The business had revenue of $276.88 million for the quarter, compared to the consensus estimate of $270.86 million. Allegro MicroSystems had a net margin of 1.50% and a return on equity of 8.30%. The business’s revenue for the quarter was up 29.2% compared to the same quarter last year. During the same quarter last year, the firm posted $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 Stock Performance

Shares of NASDAQ ALGM traded down $3.82 during midday trading on Thursday, hitting $31.55. 2,655,423 shares of the company’s stock were exchanged, compared to its average volume of 2,619,603. The stock’s 50 day moving average price is $35.33 and its 200-day moving average price 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. The firm has a market cap of $5.88 billion, a P/E ratio of 526.75, a PEG ratio of 0.99 and a beta of 1.99. Allegro MicroSystems has a twelve month low of $22.41 and a twelve month high of $71.77.

Insider Buying and Selling at Allegro MicroSystems

In other Allegro MicroSystems news, SVP Erin Hagen sold 2,285 shares of the business’s stock in a transaction dated Monday, August 10th. The shares were sold at an average price of $44.39, for a total transaction of $101,431.15. Following the sale, the senior vice president directly owned 31,052 shares in the company, valued at approximately $1,378,398.28. The trade was a 6.85% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. 0.50% of the stock is currently owned by corporate insiders.

Analyst Ratings Changes

ALGM has been the topic of several analyst reports. Wall Street Zen upgraded Allegro MicroSystems from a “hold” rating to a “buy” rating in a report on Sunday, August 2nd. Morgan Stanley increased their target price on Allegro MicroSystems from $51.00 to $52.00 and gave the company an “overweight” rating in a research note on Friday, July 31st. Wells Fargo & Company decreased their price target on shares of Allegro MicroSystems from $56.00 to $45.00 and set an “overweight” rating for the company in a research report on Tuesday, October 20th. Royal Bank Of Canada began coverage on shares of Allegro MicroSystems in a research note on Friday, October 2nd. They issued an “outperform” rating and a $50.00 price target for the company. Finally, Weiss Ratings cut Allegro MicroSystems from a “hold (c-)” rating to a “sell (d+)” rating in a research note on Friday, October 23rd. One analyst has rated the stock with a Strong Buy rating, ten have given a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $51.58.

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.