Allegro MicroSystems (NASDAQ:ALGM) Shares Gap Down - Time to Sell?

Key Points

• Allegro MicroSystems (NASDAQ: ALGM) gapped down before Monday’s trading, opening at $52.21 after closing at $54.87 and last trading around $51.69.
• Analyst sentiment is mostly constructive: 10 analysts rate the stock a Buy, with a consensus price target of $55.60, though Weiss Ratings reiterated a Sell rating. Recent target hikes from firms like Jefferies and Mizuho suggest Wall Street sees upside despite the weakness.
• The company recently beat quarterly earnings and revenue expectations, reporting $0.17 EPS on $243.19 million in revenue, while revenue rose 26.1% year over year. However, insider selling has been notable, with the CEO and a director reducing their stakes in recent months.

Allegro MicroSystems, Inc. (NASDAQ:ALGM - Get Free Report)'s stock price gapped down prior to trading on Monday . The stock had previously closed at $54.87, but opened at $52.21. Allegro MicroSystems shares last traded at $51.6920, with a volume of 112,512 shares changing hands.

Wall Street Analyst Weigh In

A number of equities analysts have weighed in on ALGM shares. Weiss Ratings reiterated a "sell (d-)" rating on shares of Allegro MicroSystems in a research note on Wednesday, May 6th. Wall Street Zen raised Allegro MicroSystems from a "hold" rating to a "buy" rating in a report on Sunday, June 21st. Jefferies Financial Group reiterated a "buy" rating and set a $62.00 price target on shares of Allegro MicroSystems in a research report on Thursday, May 7th. Needham & Company LLC boosted their price target on Allegro MicroSystems from $45.00 to $55.00 and gave the company a "buy" rating in a report on Thursday, May 7th. Finally, Mizuho upped their price objective on Allegro MicroSystems from $54.00 to $67.00 and gave the stock an "outperform" rating in a research report on Monday, June 29th. Ten research analysts have rated the stock with a Buy rating, one has given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $55.60.

Allegro MicroSystems Stock Performance

The firm's 50 day moving average price is $51.57 and its 200-day moving average price is $40.69. 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 capitalization of $9.69 billion, a PE ratio of -577.82 and a beta of 1.90.

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 the consensus estimate of $0.16 by $0.01. The firm had revenue of $243.19 million during the quarter, compared to analyst estimates of $235.94 million. Allegro MicroSystems had a positive return on equity of 6.09% and a negative net margin of 1.67%.Allegro MicroSystems's revenue for the quarter was up 26.1% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.06 EPS. Allegro MicroSystems has set its Q1 2027 guidance at 0.190-0.230 EPS. On average, research analysts expect that Allegro MicroSystems, Inc. will post 0.77 EPS for the current year.

Insiders Place Their Bets

In other news, Director Susan D. Lynch sold 16,711 shares of the business's stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $45.46, for a total value of $759,682.06. Following the completion of the sale, the director directly owned 12,805 shares in the company, valued at $582,115.30. The trade was a 56.62% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. Also, CEO Michael Doogue sold 30,089 shares of the company's stock in a transaction that occurred on Monday, May 11th. The stock was sold at an average price of $47.23, for a total value of $1,421,103.47. Following the transaction, the chief executive officer directly owned 252,797 shares of the company's stock, valued at approximately $11,939,602.31. The trade was a 10.64% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 68,607 shares of company stock valued at $3,213,714. 0.50% of the stock is owned by insiders.

Hedge Funds Weigh In On Allegro MicroSystems

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Royal Bank of Canada increased its stake in shares of Allegro MicroSystems by 70.0% during the first quarter. Royal Bank of Canada now owns 117,923 shares of the company's stock worth $2,964,000 after purchasing an additional 48,554 shares in the last quarter. AQR Capital Management LLC purchased a new position in Allegro MicroSystems in the 1st quarter valued at about $325,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its stake in Allegro MicroSystems by 31.8% in the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 354,610 shares of the company's stock valued at $8,911,000 after buying an additional 85,607 shares in the last quarter. Prudential Financial Inc. boosted its holdings in Allegro MicroSystems by 24.0% in the 2nd quarter. Prudential Financial Inc. now owns 15,684 shares of the company's stock worth $536,000 after buying an additional 3,040 shares during the last quarter. Finally, First Trust Advisors LP boosted its holdings in Allegro MicroSystems by 5.4% in the 2nd quarter. First Trust Advisors LP now owns 576,478 shares of the company's stock worth $19,710,000 after buying an additional 29,531 shares during the last quarter. 56.45% of the stock is owned by hedge funds and other institutional investors.

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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