Allegro MicroSystems (NASDAQ:ALGM) Shares Down 9.6% - Here's Why

Key Points

• Allegro MicroSystems shares fell 9.6% to about $40.02, with trading volume significantly below its average. The decline followed mixed analyst actions, including Barclays’ downgrade, although the consensus rating remains “Moderate Buy” with an average price target of $53.45.
• The company’s latest quarterly results exceeded expectations, with EPS of $0.23 versus $0.21 expected and revenue of $259.24 million versus $251.44 million. Revenue increased 27.5% year over year, while management issued quarterly EPS guidance of $0.23–$0.26.
• Insiders sold 12,502 shares worth approximately $599,170 over the past 90 days, while institutional investors hold 56.45% of the stock. Despite the selloff, several major funds—including BlackRock, Invesco and AllianceBernstein—have increased or initiated positions.

Shares of Allegro MicroSystems, Inc. (NASDAQ:ALGM - Get Free Report) fell 9.6% on Tuesday . The stock traded as low as $40.27 and last traded at $40.0160. Approximately 375,367 shares were traded during trading, a decline of 85% from the average daily volume of 2,574,270 shares. The stock had previously closed at $44.25.

Analyst Upgrades and Downgrades

A number of research firms have recently issued reports on ALGM. Barclays downgraded shares of Allegro MicroSystems from an "overweight" rating to an "equal weight" rating and set a $48.00 price target on the stock. in a research report on Monday, July 20th. Needham & Company LLC boosted their price objective on shares of Allegro MicroSystems from $55.00 to $57.00 and gave the company a "buy" rating in a research report on Thursday, July 30th. Wall Street Zen upgraded shares of Allegro MicroSystems from a "hold" rating to a "buy" rating in a research note on Sunday, August 2nd. Mizuho cut their target price on shares of Allegro MicroSystems from $67.00 to $58.00 and set an "outperform" rating on the stock in a report on Friday, July 31st. Finally, Wells Fargo & Company lifted their target price on Allegro MicroSystems from $48.00 to $56.00 and gave the company an "overweight" rating in a research note on Friday, May 8th. One research analyst has rated the stock with a Strong Buy rating, nine have given a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, Allegro MicroSystems presently has an average rating of "Moderate Buy" and an average target price of $53.45.

Allegro MicroSystems Price Performance

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 stock has a market capitalization of $7.51 billion, a price-to-earnings ratio of 672.85, a price-to-earnings-growth ratio of 1.40 and a beta of 1.94. The company has a 50-day simple moving average of $50.40 and a two-hundred day simple moving average of $43.45.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) last announced its quarterly earnings results on Thursday, July 30th. The company reported $0.23 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.21 by $0.02. The company had revenue of $259.24 million during the quarter, compared to the consensus estimate of $251.44 million. Allegro MicroSystems had a net margin of 1.50% and a return on equity of 8.30%. The company's revenue for the quarter was up 27.5% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.09 earnings per share. Allegro MicroSystems has set its Q2 2027 guidance at 0.230-0.260 EPS. On average, equities research analysts predict that Allegro MicroSystems, Inc. will post 0.65 earnings per share for the current year.

Insider Activity at Allegro MicroSystems

In other Allegro MicroSystems news, CAO Roald Graham Webster sold 5,217 shares of the business's stock in a transaction dated Thursday, May 21st. The shares were sold at an average price of $44.88, for a total transaction of $234,138.96. Following the completion of the transaction, the chief accounting officer directly owned 13,106 shares of the company's stock, valued at $588,197.28. The trade was a 28.47% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, SVP Erin Hagen sold 2,285 shares of the company's stock in a transaction dated Monday, August 10th. The stock was sold at an average price of $44.39, for a total transaction of $101,431.15. Following the completion of the transaction, the senior vice president owned 31,052 shares of the company's stock, valued at approximately $1,378,398.28. This trade represents a 6.85% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold a total of 12,502 shares of company stock worth $599,170 in the last ninety days. 0.50% of the stock is owned by insiders.

Hedge Funds Weigh In On Allegro MicroSystems

Hedge funds and other institutional investors have recently made changes to their positions in the business. BlackRock Inc. acquired a new stake in Allegro MicroSystems in the 2nd quarter valued at approximately $966,975,000. Bank of America Corp DE boosted its position in Allegro MicroSystems by 136.6% during the 3rd quarter. Bank of America Corp DE now owns 952,679 shares of the company's stock worth $27,818,000 after acquiring an additional 3,556,410 shares during the period. Invesco Ltd. boosted its position in Allegro MicroSystems by 44.0% during the 4th quarter. Invesco Ltd. now owns 7,651,051 shares of the company's stock worth $201,835,000 after acquiring an additional 2,338,624 shares during the period. Alliancebernstein L.P. boosted its position in Allegro MicroSystems by 189.4% during the 2nd quarter. Alliancebernstein L.P. now owns 2,759,872 shares of the company's stock worth $94,360,000 after acquiring an additional 1,806,183 shares during the period. Finally, Norges Bank bought a new position in shares of Allegro MicroSystems in the fourth quarter worth $38,457,000. 56.45% of the stock is currently owned by institutional investors and hedge funds.

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.

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