Allegro Microsystems Valuation Analysis
| ALGM Stock | USD 48.95 1.02 2.13% |
Above Model Estimate
Today
The intrinsic value estimate for Allegro Microsystems is based on a 3 months horizon. Negative profit margins (-1.57%) signal ongoing profitability risk influencing market valuation. Extending the time horizon generally improves valuation stability.
Allegro Microsystems's valuation depends on its margin structure, capital intensity, and cash-flow profile — each method captures a different dimension. Market multiples show how similar companies are currently priced relative to Allegro Microsystems.
Main Profitability Drivers
Allegro Microsystems reports a net profit margin of 19.00% alongside an operating margin of 21.00%. Non-operating charges narrow Allegro Microsystems' margins by roughly 2.00 percentage points between the operating and net income lines. From $725.01 million in revenue, Allegro Microsystems retained $378.94 million after cost of goods and reported -$72.76 million in net income. Return on equity is 19.00% and return on assets is 16.00%, providing a view of how efficiently Allegro Microsystems' capital and asset base are deployed. Most of Allegro Microsystems' profitability drivers are moving in the right direction, reinforcing the case for earnings durability. A more granular view is available in Allegro Microsystems' profitability metrics for a broader perspective on earnings quality.
Price Book 9.52 | Gross Profit | Price Sales 10.58 | Profit Margin | Enterprise Value Revenue 11.1 |
Allegro Microsystems Cash | $232.4 million |
Cash stood at $139.53 million as of December 31, 2025.
Revenue by Product
Allegro Microsystems provides product-level revenue detail for 2 reported segments. Allegro Microsystems' disclosed segment data is anchored by Magnetic Sensors And Other (137.77 million), followed by Power Integrated Circuits (91.44 million). Allegro Microsystems' disclosed segment data helps frame product mix, even when the reported segment totals do not map cleanly to consolidated revenue.Allegro Microsystems is a semiconductor company where revenue is driven by chip demand, production cycles, and end-market technology trends, which directly shapes its valuation profile and margin structure. Classified as a growth-oriented stock in Semiconductors & Semiconductor Equipment, its valuation multiples reflect expectations for forward earnings expansion. Enterprise value, leverage, and operating performance are compared below to identify where current pricing aligns with fundamentals and where it diverges.
Total Value Analysis
The market-value snapshot for Allegro Microsystems reflects enterprise value of 9.32 billion, market capitalization of 8.88 billion, debt of 368.49 million, and cash and equivalents of 293.59 million as of latest reporting. The gap between enterprise value and market cap reflects the net effect of debt and cash — shifts in either can materially change the total-value picture.| Takeover Price | Market Cap | Debt Obligations | Cash & Equivalents |
9.32 billion | 8.88 billion | 368.49 million | 293.59 million |
Investor Information
About 33.0% of ALGM shares are held by company insiders. ALGM has Price/Earnings To Growth (PEG) ratio of 1.64. Allegro Microsystems reported a loss per share of 0.08. ALGM had not issued any dividends in recent years. Allegro Microsystems operates at significant scale, but margin compression and elevated leverage point to mixed financial positioning. Profitability remains positive at the asset level, but ROE is not a clean read while the equity base is unusually compressed.| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating Profit Margin | 21.00% | 2.08% |
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| Total Cash From Operating Activities | $67.64 million | $71.2 million |
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Asset Utilization
The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The recent return on assets of Allegro suggests not a very effective usage of assets in May.Macro event markers
Discounted Cash Flow Analysis
Allegro Microsystems's custom levered DCF lands near 3.12 per share compared with market pricing around 48.95, leaving the stock above the modeled value. Relative to the modeled value, the stock sits roughly 93.6% higher. Current assumptions include 13.24% WACC, 4.0% perpetual growth, and about 79.72 Million of next-period free cash flow. Discounted forecast cash flows sum to about 233.21 Million before the terminal component, and present terminal value still represents roughly 66.5% of enterprise value.Model Value / Share
3.12
Equity value per share from the current custom levered DCF summary row.
Market Price
48.95
Current market price used by the same scenario.
Model Premium
93.6%
Market price sits above the model output.
WACC / LT Growth
13.24% / 4.0%
Forecast horizon: 2022 to 2031Terminal value share of EV: 66.5%
Allegro Market Price vs. Intrinsic Value
This chart compares observed market pricing with the model-derived equity value per share across forecast periods. It also illustrates the relative premium or discount, expressed as a percentage difference between market valuation and modeled intrinsic value.
Projected Revenue and Levered Free Cash Flow
Revenue and levered free cash flow projections are presented in billions, outlining the expected financial trajectory over the modeled horizon.
Key Model Assumptions
The inputs below reflect the core assumptions applied in the valuation model, including growth expectations, discount rates, and capital structure considerations.
| Input | Current Value |
|---|---|
| Weighted Average Cost of Capital | 13.24% |
| Long-Term Growth Rate | 4.0% |
| Cost of Equity | 13.54% |
| After-Tax Cost of Debt | 4.55% |
| Debt Weighting | 3.07% |
| Equity Weighting | 96.93% |
| Net Debt | 118.52 million |
| Enterprise Value | 696.25 million |
| Present Terminal Value | 463.04 million |
| Terminal Value Share of EV | 66.5% |
Forecast Detail and Valuation Progression
This table presents the underlying forecast data used in the valuation, including revenue, cash flow generation, discounting effects, and the resulting per-share value across each projected period.
| Year | Revenue | Revenue Growth | Free Cash Flow | PV of LFCF | Equity Value / Share |
|---|---|---|---|---|---|
| 2022 | 768.67 million | 0.00% | 86.19 million | 0 | 3.12 |
| 2023 | 973.65 million | 26.67% | 113.43 million | 0 | 3.12 |
| 2024 | 1.05 billion | 7.78% | 56.94 million | 0 | 3.12 |
| 2025 | 725.01 million | -30.91% | 21.96 million | 0 | 3.12 |
| 2026 | 890.1 million | 22.77% | 0 | 0 | 3.12 |
| 2027 | 948.63 million | 6.58% | 59.42 million | 52.47 million | 3.12 |
| 2028 | 1.01 billion | 6.58% | 63.32 million | 49.38 million | 3.12 |
| 2029 | 1.08 billion | 6.58% | 67.49 million | 46.47 million | 3.12 |
| 2030 | 1.15 billion | 6.58% | 71.93 million | 43.73 million | 3.12 |
| 2031 | 1.22 billion | 6.58% | 76.66 million | 41.16 million | 3.12 |
Profitability Analysis
Based on Allegro Microsystems' financial statements, Allegro Microsystems is generating positive operating income but reporting a net loss of -72.76 million, indicating that non-operating charges are eroding bottom-line results. The operating margin stands at 21.0% while the net profit margin is 19.0%, with return on equity at 19.0%. Despite reporting a net loss, most profitability indicators are improving year over year, suggesting the margin structure may be stabilizing.Net Loss | First Reported 2019-06-30 | Previous Quarter 6.52 million | Current Value 8.3 million | Quarterly Volatility 26.89 million |
Macro event markers
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 56.00% | 46.28% |
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| Operating Profit Margin | 21.00% | 2.08% |
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Profitability for Allegro Microsystems depends on margin structure, capital efficiency, and cost control. Net margin of 19.0% reflects solid earnings conversion and cost discipline relative to revenue. What follows tests whether current margins and returns are sustainable under prevailing business conditions. Allegro Microsystems reports return on equity of 19.0%, above the level typically associated with durable competitive advantages.
Earnings per Share Projection vs Actual
Allegro Microsystems earnings estimates reflect the collective view of covering analysts, with revisions signaling changing fundamentals. Consensus places Allegro Microsystems' next EPS at 0.20, with a 0.18 to 0.26 dispersion range. Consensus EPS estimates for Allegro Microsystems represent the market's baseline earnings expectation. Deviations from this consensus on report day typically drive the sharpest price reactions. Allegro Microsystems reported estimated earnings of 0.2016 in earnings per share on 30th of June 2026. Comparing this projection against historical actuals shows whether the consensus is trending toward or away from the company's recent earnings trajectory.Macro event markers
Earnings Estimation Breakdown
12 analysts contribute to the current consensus. The last reported EPS was 0.00 as of 31st of March 2026.
Last Reported EPS
0.18
Lowest
0.20
Expected EPS
0.26
Highest
Analyst estimate range around the current expected EPS projection.
Earnings Projection Consensus
| Number of Analysts | Historical Accuracy | Last Reported EPS | Estimated EPS for 30th of June 2026 | Current EPS (TTM) | |
| 12 | 71.67% | 0.00 | 0.20 | -0.08 |
Ownership Allocation
The majority of Allegro Microsystems' outstanding shares are owned by institutional investors. High institutional ownership often reflects the stock's eligibility for passive index funds, which are required to hold positions proportional to index weights regardless of their own investment view. Active managers holding Allegro Microsystems must also disclose positions above certain thresholds through SEC filings.Revenue and Profit Overview
ALGM reported previous year's revenue of $725.01 million. Net Loss for the year was -$72.76 million with profit before overhead, payroll, taxes, and interest of $378.94 million.Reading the Current Signals
A price-to-earnings ratio of 128.42 sits well above typical market averages, reflecting expectations for significant future growth rather than current earnings alone. For technology hardware and services companies, the earnings multiple reflects operating economics and cost structure more than top-line growth alone. At 19.0%, the margin structure places Allegro Microsystems in a range where operational efficiency improvements would have an outsized impact on earnings. This margin profile is a direct function of the underlying business economics. Allegro Microsystems carries minimal debt at 0.05, more financial cushion than many comparable companies - relevant during periods of heightened market volatility. ROE at 19.0% reflects strong capital deployment - the business converts its equity base into earnings more effectively than most peers in Semiconductors & Semiconductor Equipment. Allegro Microsystems trades with growth-oriented dynamics, where expectations for future earnings expansion drive larger price swings than value-oriented names typically experience. At these levels, the market is discounting sustained above-average earnings growth. The key question is whether Allegro Microsystems can maintain the growth trajectory embedded in its current multiple.
Valuation Synthesis
Allegro Microsystems operates as a moderately profitable business where earnings are shaped by operating scale and the underlying cost structure within the technology hardware and services companies space. Above-average margins combined with strong return on equity reflect durable competitive positioning, reinforced by the scalability of the underlying business model. On balance, Allegro Microsystems is a fundamentally strong business whose premium valuation is backed by the underlying economics. Whether that premium expands depends on revenue growth, margin trajectory, and product cycle dynamics.
For Allegro Microsystems, the valuation signals above are most useful when compared against future developments as new data becomes available. At current multiples, the valuation is priced for continued growth, making earnings trajectory the key variable to watch.
Valuation Framework, Methodology & Assumptions
Allegro Microsystems is a mid-cap equity in Semiconductors & Semiconductor Equipment, Information Technology categories. Intrinsic value assumptions are benchmarked against sector averages. Current valuation multiples for Allegro Microsystems include enterprise value (TTM) of 9.32 billion, P/E of 128.42, P/B of 9.52.
Reported values for Allegro Microsystems are derived from periodic company reporting and market reference feeds and standardized for analysis. Analyst inputs may be included when coverage is available. Valuation outputs are model-derived and depend on published assumptions and reference inputs.
The analysis above is generated by quantitative models and is provided for informational and educational purposes only. It does not constitute financial advice, investment recommendations, or an endorsement to buy or sell any security. All investing involves risk, including the possible loss of principal. Consult a qualified financial advisor before making investment decisions. See our Terms of Use for full details.
Financial data referenced in this analysis is derived from publicly available SEC filings, audited financial statements, and third-party market data providers. The intrinsic value estimate is generated by Macroaxis quantitative models that incorporate fundamental analysis, technical indicators, and risk metrics.
The methodology combines multiple analytical inputs:
- Fundamental analysis - financial statements, profitability ratios, debt structure, and cash flow metrics sourced from SEC filings and public financial reports
- Technical indicators - historical price patterns, momentum signals, and volatility measures
- Risk assessment - probability of bankruptcy models, market risk metrics, and downside scenario analysis
- Peer comparison - relative valuation against industry peers using standardized multiples
Model outputs are refreshed periodically as new financial data becomes available. Past model performance is not indicative of future results. The intrinsic value estimate reflects a point-in-time calculation and should be considered alongside other research and professional advice.
Data sourced from SEC filings (EDGAR), public financial statements, and market data providers.
Editorial review and methodology oversight provided by: Rifka Kats, Member of Macroaxis Editorial Board
Growth Indicators
Growth analysis for Allegro Microsystems matters because the current setup looks more like an earnings-recovery story than a premium-multiple growth case. A disciplined review here compares growth rates with margin repair, leverage, and execution quality before treating the setup as a durable expansion story.
| Common Stock Shares Outstanding | 187.71 million | |
| Quarterly Earnings Growth Y O Y | -48.50% | |
| Forward Price Earnings | 58.1395 |
Allegro Microsystems Current Valuation Indicators
A net-worth review of Allegro Microsystems links market cap to balance-sheet health, cash flow, and implied growth expectations. Enterprise value (TTM) is near 9.32 billion and annual revenue is around 725.01 million. Reported values are derived from company filings, audited financial statements, and market data, and are standardized within Macroaxis quantitative models for consistency. Model outputs reflect a point-in-time estimate based on available data and assumptions and should be interpreted alongside changes in operating performance, market conditions, and forward expectations.