Allegro MicroSystems (NASDAQ:ALGM) Stock Price Up 6.6% - Should You Buy?

Key Points

• Allegro MicroSystems shares rose 6.6% on Wednesday, trading as high as $53.46 and closing near $53.63 on lighter-than-average volume.
• Wall Street sentiment is mostly positive, with several firms raising price targets and the stock holding a consensus rating of “Moderate Buy” with an average target of $51.80.
• Recent results beat expectations: Allegro reported Q1 EPS of $0.17 versus $0.16 expected and revenue of $243.19 million, up 26.1% year over year.

Shares of Allegro MicroSystems, Inc. (NASDAQ:ALGM - Get Free Report) rose 6.6% during trading on Wednesday . The company traded as high as $53.46 and last traded at $53.6270. Approximately 1,638,851 shares were traded during trading, a decline of 33% from the average daily volume of 2,434,656 shares. The stock had previously closed at $50.33.

Wall Street Analyst Weigh In

A number of brokerages have weighed in on ALGM. Barclays upped their price target on Allegro MicroSystems from $46.00 to $48.00 and gave the company an "overweight" rating in a research report on Friday, May 8th. Wells Fargo & Company increased their target price on Allegro MicroSystems from $48.00 to $56.00 and gave the stock an "overweight" rating in a report on Friday, May 8th. Weiss Ratings reiterated a "sell (d-)" rating on shares of Allegro MicroSystems in a report on Wednesday, May 6th. UBS Group raised their price target on Allegro MicroSystems from $52.00 to $55.00 and gave the company a "buy" rating in a report on Friday, May 8th. Finally, Mizuho increased their target price on Allegro MicroSystems from $44.00 to $54.00 and gave the company an "outperform" rating in a research note on Friday, May 8th. Ten analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $51.80.

Allegro MicroSystems Stock Performance

The company has a quick ratio of 2.21, a current ratio of 3.45 and a debt-to-equity ratio of 0.30. The firm has a market capitalization of $10.06 billion, a P/E ratio of -596.62 and a beta of 1.98. The stock has a fifty day moving average of $40.79 and a 200-day moving average of $34.83.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) last posted its quarterly earnings data on Thursday, May 7th. The company reported $0.17 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.16 by $0.01. The business had revenue of $243.19 million during the quarter, compared to the consensus estimate 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 quarterly revenue was up 26.1% on a year-over-year basis. During the same period last year, the company earned $0.06 earnings per share. Allegro MicroSystems has set its Q1 2027 guidance at 0.190-0.230 EPS. On average, research analysts anticipate that Allegro MicroSystems, Inc. will post 0.77 EPS for the current year.

Insider Transactions at Allegro MicroSystems

In other Allegro MicroSystems news, Director Susan D. Lynch sold 16,711 shares of the firm'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 transaction, the director directly owned 12,805 shares in the company, valued at $582,115.30. This trade represents a 56.62% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, SVP Sharon Briansky sold 8,948 shares of the firm's stock in a transaction that occurred on Monday, May 11th. The shares were sold at an average price of $47.54, for a total value of $425,387.92. Following the completion of the transaction, the senior vice president owned 75,232 shares of the company's stock, valued at approximately $3,576,529.28. This represents a 10.63% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 63,607 shares of company stock valued at $2,950,114. 0.40% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. Royal Bank of Canada lifted its holdings in Allegro MicroSystems by 70.0% during the 1st 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 during the last quarter. AQR Capital Management LLC acquired a new position in shares of Allegro MicroSystems during the 1st quarter worth $325,000. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its position in Allegro MicroSystems by 31.8% during 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 worth $8,911,000 after acquiring an additional 85,607 shares during the last quarter. Prudential Financial Inc. grew its position in Allegro MicroSystems by 24.0% during the 2nd quarter. Prudential Financial Inc. now owns 15,684 shares of the company's stock worth $536,000 after acquiring an additional 3,040 shares during the last quarter. Finally, First Trust Advisors LP grew its position in shares of Allegro MicroSystems by 5.4% in the 2nd quarter. First Trust Advisors LP now owns 576,478 shares of the company's stock valued at $19,710,000 after buying an additional 29,531 shares during the last quarter. 56.45% of the stock is currently owned by 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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