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

Key Points

• Allegro MicroSystems shares fell sharply, opening at $43.50 versus the prior close of $46.80 and last trading near $42.43.
• Analyst sentiment remains broadly positive: the stock has a consensus “Moderate Buy” rating and an average price target of $55.20, despite recent downgrades from some firms.
• The company exceeded quarterly expectations, reporting $0.17 in earnings per share and $243.19 million in revenue, with revenue up 26.1% year over year.

Allegro MicroSystems, Inc. (NASDAQ:ALGM - Get Free Report)'s share price gapped down prior to trading on Tuesday . The stock had previously closed at $46.80, but opened at $43.50. Allegro MicroSystems shares last traded at $42.4320, with a volume of 228,841 shares changing hands.

Analyst Ratings Changes

Several brokerages have recently weighed in on ALGM. Evercore reissued an "outperform" rating and set a $53.00 price objective on shares of Allegro MicroSystems in a report on Friday, May 8th. Needham & Company LLC raised their target price on Allegro MicroSystems from $45.00 to $55.00 and gave the stock a "buy" rating in a research report on Thursday, May 7th. Wells Fargo & Company boosted their price target on shares of Allegro MicroSystems from $48.00 to $56.00 and gave the company an "overweight" rating in a report on Friday, May 8th. Wall Street Zen cut shares of Allegro MicroSystems from a "buy" rating to a "hold" rating in a research note on Saturday. Finally, Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Allegro MicroSystems in a report on Wednesday, May 6th. Nine analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Allegro MicroSystems presently has a consensus rating of "Moderate Buy" and an average target price of $55.20.

Allegro MicroSystems Price Performance

The company has a debt-to-equity ratio of 0.30, a quick ratio of 2.21 and a current ratio of 3.45. The firm has a market cap of $8.27 billion, a P/E ratio of -494.32 and a beta of 1.90. The company has a 50-day moving average of $51.96 and a 200 day moving average of $42.34.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) last announced its quarterly earnings results on Thursday, May 7th. The company reported $0.17 earnings per share for the quarter, beating analysts' consensus estimates of $0.16 by $0.01. The firm had revenue of $243.19 million for the quarter, compared to analysts' expectations of $235.94 million. Allegro MicroSystems had a positive return on equity of 6.09% and a negative net margin of 1.67%.The business's revenue was up 26.1% compared to the same quarter last year. During the same period in the prior year, the business posted $0.06 earnings per share. Allegro MicroSystems has set its Q1 2027 guidance at 0.190-0.230 EPS. On average, sell-side analysts anticipate that Allegro MicroSystems, Inc. will post 0.77 EPS for the current year.

Insiders Place Their Bets

In other news, CAO Roald Graham Webster sold 5,217 shares of Allegro MicroSystems stock in a transaction that occurred on Thursday, May 21st. The shares were sold at an average price of $44.88, for a total value of $234,138.96. Following the completion of the transaction, the chief accounting officer owned 13,106 shares in the company, valued at approximately $588,197.28. The trade was a 28.47% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, SVP Ian Kent sold 2,642 shares of the business's stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $41.56, for a total value of $109,801.52. Following the completion of the transaction, the senior vice president directly owned 25,392 shares in the company, valued at $1,055,291.52. The trade was a 9.42% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 68,607 shares of company stock worth $3,213,714 in the last quarter. 0.50% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Allegro MicroSystems

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. Invesco Ltd. grew its holdings in shares of Allegro MicroSystems by 44.0% during the fourth quarter. Invesco Ltd. now owns 7,651,051 shares of the company's stock worth $201,835,000 after purchasing an additional 2,338,624 shares during the last quarter. State Street Corp lifted its position in Allegro MicroSystems by 1.5% during the 4th quarter. State Street Corp now owns 5,359,488 shares of the company's stock worth $141,383,000 after buying an additional 78,203 shares in the last quarter. Adage Capital Partners GP L.L.C. lifted its position in Allegro MicroSystems by 77.8% during the 4th quarter. Adage Capital Partners GP L.L.C. now owns 2,803,944 shares of the company's stock worth $73,968,000 after buying an additional 1,227,317 shares in the last quarter. Alliancebernstein L.P. grew its holdings 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 last quarter. Finally, Geode Capital Management LLC increased its position in Allegro MicroSystems by 1.0% in the 4th quarter. Geode Capital Management LLC now owns 2,393,968 shares of the company's stock valued at $63,165,000 after acquiring an additional 24,839 shares in the last quarter. 56.45% of the stock is owned by institutional investors and hedge funds.

Allegro MicroSystems Company Profile

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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