ALLEGRO MICROSYSTEMS, INC. (ALGM) Stock Analysis

Price updated 2 days ago · SEC data refreshed 3 months ago · Not investment advice

ALLEGRO MICROSYSTEMS, INC.

ALGM Technology Semiconductors📄 SEC filings ↗ CUSIP 01749D105
Valuation N/A
▾ What's in the 43/100 risk score? (higher = riskier)
Fundamental health (43%) 22/100 → +9.4
leverage 20/100 · FCF trend 25/100 · Altman Z not scored — input unavailable (see Financial Health)
Smart money (short interest + insider buying) (31%) 79/100 → +24.8
Macro backdrop (VIX, curve, credit, fear/greed + week-over-week momentum) (26%) 33/100 → +8.5
Total43/100

Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.

💵 Price $33.85 · 2 days ago 📄 Financials SEC EDGAR · refreshed 3 months ago

How to read ALGM (pre-profit growth)

This company is reinvesting instead of generating profit, so a standard DCF cannot price it. The useful question is whether the growth the market is paying for is achievable — and whether the company can fund itself until then.

Where to start — the sections that matter most for this stock
  1. 1 Reverse-DCF — the growth the price demands ↓
    It shows exactly how fast the business must grow to justify today's price. Compare that to what comparable companies have actually achieved.
  2. 2 Cash runway ↓
    Can it reach profitability before it has to raise money and dilute shareholders?
  3. 3 Interactive calculator ↓
    Set your own growth + margin assumptions and see what the business would be worth if you are right.
Or — what are you trying to decide?
A note on process: fear-driven decisions — including fear of missing out — tend to be the expensive ones. A stock up 10% a day for three days is excitement, not evidence. Whichever reader you are, the data below is there to be checked before anything is decided.
🚀
"It's surging — should I chase it?"
The momentum / FOMO trade. Before you chase, see whether the people who know it best are quietly selling into the rally.
🏷️
"Is it a cheap bargain?"
The deep-value trade. How far below assets and our value it trades — and whether it's cheap for a reason.
ⓘ Using the right valuation lens for this business type

Standard DCF doesn't fit ALGM well — but that's expected for this kind of business. The Rule of 40 (Pre-Profit Growth) Lens below uses the metrics actually used by analysts who value semiconductors. Reverse DCF + Football Field also work as cross-checks.

ⓘ Why does ALGM trade at $33.85?

ALLEGRO MICROSYSTEMS, INC. has 185.0 million shares outstanding. At $33.85 per share, the market values all outstanding ALGM equity at $6.3 billion. That's market capitalization, not enterprise value — enterprise value also accounts for debt and cash. The share price by itself tells you almost nothing — a company can pick any share price by splitting or issuing more shares. What matters is the total value (Market Cap?Market Cap — The total dollar value the market is assigning to the entire company.
Why it matters: This is the number that actually matters when comparing companies. Two companies with the same business but different share counts have the same market cap.
Reference: Mega cap >$200B · Large $10–200B · Mid $2–10B · Small $300M–2B · Micro <$300M
Full explanation →
) compared to what the business actually produces. This page values ALGM in Per Share?Per Share — A company-level figure divided by total shares — what one share represents.
Why it matters: Per-share metrics are the only way to fairly compare two companies with different share counts.
Full explanation →
economics — what each share represents of the underlying business. Play with the share-price calculator on the homepage →

Loading insider & short-seller data…
Checking filings for failure warnings…

Football field: where does the price sit?

Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.

$13$27$42$56$71Current price $33.85EV / Sales (p25→p75)$13.83$66.74
The current price sits inside each method's range — roughly fair on this blended view.

Industry multiples sourced from: industry: Semiconductors. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.

How does ALGM stack up against its closest peers?

We take the 4 same-industry companies most similar to ALGM (similar size) and check what investors are paying for each dollar of their revenue (or profits). If ALGM is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, FCF yield (in the table) is usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.

▾ What's "EV / Sales" in plain English?

EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.

EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).

p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.

What peers trade at (p25 / median / p75)
EV / Sales?EV / Sales — For every $1 of yearly revenue, this is how many dollars investors pay to own the whole business (including debt).
Why it matters: Works for pre-profit growth companies where P/E and FCF don't apply. The most apples-to-apples cross-company multiple because it ignores accounting choices.
Reference: 1–3x for mature companies · 4–10x for software/SaaS · 10–20x for hypergrowth · >20x is rare and demanding
Full explanation →
5.7x / 8.2x / 9.1x
EV / Gross Profit?EV / Gross Profit — Enterprise value divided by gross profit — the multiple paid for what each dollar of sales contributes after direct costs.
Why it matters: More refined than EV/Sales for high-margin businesses (software, marketplaces) where gross margin is the real economic engine.
Reference: 8–15x for SaaS · 15–25x for hypergrowth software · >30x demanding
Full explanation →
12.8x / 15.7x / 19.2x

Bold middle number = median peer. Half the peers trade above it, half below. Computed over 4 same-industry peers; implausible multiples excluded.

Peer-implied value check
$38.61
If ALGM traded at the typical (median) peer's EV/Sales multiple, the share price would be about $38.61.
Plain English: the stock currently trades at $33.85. That's 12.3% LESS than peer multiples imply — the stock looks cheap vs peers. Either an opportunity, or the market sees something wrong with this name that doesn't apply to peers.

⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.

▾ View peer list (8)
Ticker Company Industry Mcap EV/Sales EV/GPEV/EBIT FCF Yield
SQNS SEQUANS COMMUNICATIONS Semiconductors $7.1B 256.6x
SLAB SILICON LABORATORIES INC. Semiconductors $7.2B 9.1x 15.7x 1.7%
KLIC KULICKE & SOFFA INDUSTRIES INC Semiconductors $5.3B 8.2x 19.2x 1.0%
SYNA SYNAPTICS Inc Semiconductors $5.3B 5.7x 12.8x 1.8%
MRCY MERCURY SYSTEMS INC Semiconductors ·fallback $6.7B 7.4x 26.4x 1.4%
VSH VISHAY INTERTECHNOLOGY INC Semiconductors ·fallback $7.1B 2.6x 13.5x141.0x 2.1%
PLXS PLEXUS CORP Semiconductors ·fallback $7.2B 1.8x 17.7x35.5x 1.7%
NVTS Navitas Semiconductor Corp Semiconductors ·fallback $5.2B 62.8x 1.7%

Quality & solvency checks

Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.

Altman Z-Score?Altman Z-Score — A bankruptcy-risk score combining 5 financial ratios into one number. Predictive of bankruptcy within 2 years.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
n/a
Not reliably computable

We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.

Piotroski F-Score?Piotroski F-Score — A 9-point quality checklist scoring profitability, leverage, and operating efficiency.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
7 / 9
Strong
▾ The checks — what passed, what didn't (and what we couldn't measure)
  • Positive net income
    Net income -$14.9M in FY2026.
    Why this matters: Does the company actually earn a profit? Sustained losses eventually force it to raise money — diluting you — or take on debt.
  • Positive operating cash flow
    Operating cash flow $163.1M (was $61.9M the prior year).
  • Cash flow backs up reported profit
    Operating cash flow $163.1M vs net income -$14.9M.
  • Return on assets improving
    Return on assets -1.1% vs -5.1% a year ago.
  • Debt load (vs assets)
    Long-term debt is 19.8% of assets vs 23.9% a year ago ($280.9M of $1,416.2M assets).
  • Short-term liquidity (current ratio)
    Current ratio 3.45x vs 4.30x a year ago.
    Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
  • Share count (dilution)
    Share count declined 1.4% (187.7M → 185.0M year-over-year), so the no-dilution check passed. (One-year change; the multi-year buyback pace can differ.)
  • Pricing power (gross margin)
    Gross margin 46.3% vs 44.3% a year ago.
  • Sales per asset (asset turnover)
    Asset turnover 0.63x vs 0.51x a year ago.

Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.

What if you assume different inputs?

Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount Rate?Discount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation →
(the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for ALGM. Open Advanced to also change beta, growth and the rate path.

Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.

4.5% (risk-free)9-10% normal18% (deep-risk)
0%2-3% (GDP)5% (rarely sustainable)

A full intrinsic value isn't shown for ALGM because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.

For comparison — the revenue growth today's price already assumes

⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
Where the discount rate comes from — discount rate = risk-free + beta × equity-risk-premium
What you'd earn risk-free from government bonds — the floor under every other rate. Slide it down to model the market expecting rate cuts (value rises); up for higher-for-longer.
The extra yearly return investors demand for owning stocks instead of safe bonds — the price of risk. History runs ~4.5–6.5%; we default to 5.5% (slightly conservative). It's an estimate, not a law — lower it if you think equities are less risky than that.
Inflation reduces the purchasing power of a nominal return: a 9% gain at 3% inflation is about 6% in real terms. The intrinsic value above is already in today's dollars (a nominal DCF carries inflation in both the growth and the discount rate), so this switch does not change the value — it restates the return in real terms.
Higher beta → higher discount rate (sets the rate above). 1.0 = moves with the market.
What you think ALGM can grow revenue for ~5 years, then fades to terminal.
For a pre-profit company: the % of revenue that eventually becomes free cash flow once mature. (Our published value uses the sector norm.)
All inputs start at the values our model used.

    Copy shareable link to this scenario →

    Price$33.85
    Model IVNot applicable — DCF couldn't price this stock. The other valuation lenses on this page (reverse-DCF, peers, sector lens — whichever apply to this filer) carry the read instead.

    A standard discounted cash flow?DCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
    Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
    Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
    Full explanation →
    (DCF) valuation is not meaningful for Allegro MicroSystems, Inc. because its gross margin is compressing (53% to 46.3%) and net income was negative in the latest period, despite positive operating cash flow. Investors are likely betting on future revenue growth and potential margin expansion beyond what trailing cash flows currently support. The market may be assigning value to the company's potential in advanced driver-assistance systems (ADAS) and electric vehicle (EV) power management, which is not fully captured by backward-looking models. The #1 quantifiable risk is the continued compression of gross margins.

    ⚠️ Revenue/margin projection model used - trailing FCF may understate growth runway at current scale.

    As of 3 months ago

    Anatomy of a share

    What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.

    ALGM ALLEGRO MICROSYSTEMS, INC. stock anatomy showing per-share revenue, operating expenses, free cash flow, and debt
    −1.7%
    loss
    Where each $1 of revenue goes
    For every $1 of revenue, ALGM currently loses 1.7¢ — costs exceed sales. A money-losing business can still be a good investment if losses are shrinking toward profitability; check the trend, not just the snapshot.
    Net margin = net income ÷ revenue (most recent fiscal year).
    Plain English: each share (at $34) represents $4.81 of revenue per share per year, $0.08 lost per share per year, and $0.42 of free cash flow per share from the latest fiscal year. Each share carries $1.52 of total debt (interest-bearing borrowings, current + long-term).
    What's free cash flow / what do these mean?

    Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.

    Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.

    Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.

    Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.

    What you actually need to decide

    Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.

    🐂 The Bull Case
    For the stock to perform, gross margins must stabilize and expand from the current compressing trend (53% to 46.3%), leading to sustained profitability. This would validate the market's growth expectations.
    🐻 The Bear Case
    The biggest fundamental risk is the continued compression of gross margins (53% to 46.3%), which, if it persists, could undermine future profitability despite revenue growth and lead to ongoing negative net income.
    📌 Signposts to watch — update your view as these print
    • Next quarter's gross margin trend
    • Revenue growth rate acceleration
    • Announcements of new design wins in key growth markets

    The trend, in plain numbers (FY2025 → FY2026, latest reported)

    Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.

    ✅ Improving
    • Revenue grew +23% to $890.1M.
    • Free cash flow turned positive at $77.0M.
    • Gross margin improved to 46% (+2 pts).
    • Still unprofitable at -$14.9M — loss narrowing.

    Nothing was clearly worsening year-over-year.

    Management & Leadership

    Allegro MicroSystems, Inc. is led by President and CEO Vineet Nargolwala, who has been in his role since 2022. The company focuses on developing and manufacturing sensor and power ICs. Ravi Vig serves as the Chief Financial Officer.

    Vineet Nargolwala
    President and Chief Executive Officer
    Ravi Vig
    Chief Financial Officer

    What They Make

    Allegro MicroSystems designs, develops, manufactures, and markets high-performance power and sensing semiconductor solutions. These products are primarily sold to customers in the automotive and industrial markets.

    End Markets

    AutomotiveIndustrialConsumer

    Revenue Drivers

    Sensor ICs
    Power ICs
    Custom ICs
    Market Cap: 6.3BBeta: 2.01

    Why Is It Priced Like This?

    Why Customers Pay

    High-accuracy magnetic sensors for position and speed detection
    Efficient power management ICs for motor control and power conversion
    Robust and reliable solutions for harsh automotive environments
    No discounted-cash-flow value for this filer We aren't publishing a discounted-cash-flow value here: the model's output failed our plausibility checks, so showing it would imply more precision than we have.

    What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.

    The market is likely pricing Allegro MicroSystems based on expectations for continued revenue growth (3.7%/yr over 4 years) and its positive operating cash flow, rather than current net income, which was negative. The market may be assigning value to the company's potential in advanced driver-assistance systems (ADAS) and electric vehicle (EV) power management, which is not in the model, anticipating future margin expansion and profitability as these segments mature.

    Business Model & Valuation

    How They Make Money

    Sales of magnetic sensor integrated circuits (ICs)
    Sales of power management integrated circuits (ICs)
    Sales of custom application-specific integrated circuits (ASICs)

    The company's long-term debt is rising from $25M to $281M, indicating it funds operations and growth through a mix of debt and positive operating cash flow.

    Growth / Revenue DCF

    Extreme market premium (P/FCF 116x): market is pricing future growth far beyond current FCF. Using revenue/margin model.

    Show advanced inputs
    Revenue Growth3.7%

    What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project product, services and recurring/cloud lines independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.

    Maturity & Competitive Position

    Growth / re-investment phase

    Moat Signals

    Proprietary sensor technology
    Strong customer relationships in automotive
    High switching costs for integrated solutions

    Revenue is growing at 3.7%/yr over four years, from $769M to $890M.

    Geography & Markets

    Allegro MicroSystems is headquartered in the US and operates globally, serving customers across North America, Europe, and Asia. Exact geographic revenue mix is not available from current data sources.

    Geographic Risks

    Exposure to cyclical automotive and industrial markets
    Supply chain disruptions in semiconductor manufacturing

    Market Signals

    These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.

    Model neutral, tape bullish
    RSI?RSI — Relative Strength Index — a 0-100 momentum gauge. Above 70 = overbought; below 30 = oversold.
    Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
    Reference: 30–70 normal · >70 overbought · <30 oversold
    Full explanation →
    (14)
    55.9NeutralMomentum is balanced — neither overbought nor oversold.
    MACD?MACD — Moving Average Convergence Divergence — compares a fast and a slow price trend to gauge momentum direction.
    Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
    Reference: Line above signal = bullish momentum · below = bearish
    Full explanation →
    BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
    50-Day Average$40.87Price below (-17.2%)Price below its 50-day average = near-term downtrend.
    200-Day Average$33.37Price aboveThe 200-day line is the long-term trend divider — above it is generally considered a bull market for the stock.
    50 vs 200 CrossGolden50-day above 200-dayA "golden cross" — the medium trend has overtaken the long trend (often read as bullish).

    Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.

    Data Quality & Risk Flags (5 notes — click to expand/collapse)

    Guardrail Notes (5)
    • Revenue/margin projection model used - trailing FCF may understate growth runway at current scale.
    • Terminal growth (3%) capped to 3% (80% of near-term growth 3.7%).
    • Price is far above the model output - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
    • Extreme valuation (P/IV withheld — see the note above); output dominated by data/units issue (often a multi-class share-count mismatch). Suppressed.
    • DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.

    Financial Statements (5-year tables — click to expand)

    From ALLEGRO MICROSYSTEMS, INC.'s SEC filings (EDGAR).

    Income (5yr)

    YearRevenueNet IncomeEPS
    2026890.1M-14.9M$-0.08
    2025725.0M-73.0M$-0.39
    20241.0B152.7M$0.78
    2023973.7M187.4M$0.97
    2022768.7M119.4M$0.62

    Cash Flow (5yr)

    YearOperating CFCapEx− SBC & adj.Free Cash Flow
    2026 163.1M 38.2M 47.9M 77.0M
    2025 61.9M 40.0M 41.9M -19.9M
    2024 181.7M 124.8M 42.5M 14.5M
    2023 193.2M 79.8M 61.8M 51.6M
    2022 156.1M 69.9M 33.5M 52.6M

    How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 163.1M − 38.2M − 47.9M (SBC & adj.) = 77.0M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a projected from revenue × terminal margin, not this single year.

    Balance Sheet

    Total Assets1.4B
    Total Liabilities459.7M
    Equity954.7M
    Total Debt280.9M

    Similar companies worth a look

    Same sector and industry, similar fundamentals shape. Verify everything yourself — this list is computed mechanically and does not reflect our judgment about whether any of these are a good investment.

    PG
    Methodology by Pouyan Golshani, MD — founder of Gighz. Savng was built by a physician for busy professionals: every number on this page comes from SEC filings (EDGAR) and FINRA data through transparent, rules-based models — no analyst opinions, no hidden inputs. How we calculate every number →
    ⚠️ Not investment advice. Automated model outputs, last refreshed May 30, 2026 (the analysis-refresh date, not the latest filing period). All models have blind spots. Full disclaimer →
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