Allegro MicroSystems (NASDAQ:ALGM) Price Target Cut to $46.00 by Analysts at Mizuho

Key Points

• Mizuho cut Allegro MicroSystems’ price target from $58 to $46 while maintaining an “outperform” rating, implying 39.27% upside from the prior close.
• Analyst sentiment remains broadly positive but has become more cautious: MarketBeat reports a “Moderate Buy” consensus and a $50 average target, while Wells Fargo and Needham also lowered their targets.
• Allegro’s latest quarter exceeded expectations, with revenue up 29.2% year over year to $276.88 million and EPS of $0.26 versus the $0.24 consensus estimate; however, its reported P/E above 500 and 1.5% net margin highlight valuation and profitability risks.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) had its target price decreased by Mizuho from $58.00 to $46.00 in a report issued on Friday, Benzinga reports. The firm presently has an "outperform" rating on the stock. Mizuho's price target would suggest a potential upside of 39.27% from the stock's previous close.

A number of other analysts also recently commented on the company. Wells Fargo & Company reduced their price objective on Allegro MicroSystems from $56.00 to $45.00 and set an "overweight" rating for the company in a research report on Tuesday, October 20th. Weiss Ratings lowered Allegro MicroSystems from a "hold (c-)" rating to a "sell (d+)" rating in a research note on Friday, October 23rd. Royal Bank Of Canada started coverage on Allegro MicroSystems in a research note on Friday, October 2nd. They issued an "outperform" rating and a $50.00 target price for the company. Needham & Company LLC reduced their target price on Allegro MicroSystems from $57.00 to $50.00 and set a "buy" rating for the company in a research report on Thursday. Finally, Morgan Stanley boosted their price target on shares of Allegro MicroSystems from $51.00 to $52.00 and gave the company an "overweight" rating in a report on Friday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, ten have assigned a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, Allegro MicroSystems has a consensus rating of "Moderate Buy" and a consensus price target of $50.00.

Allegro MicroSystems Price Performance

Shares of Allegro MicroSystems stock opened at $33.03 on Friday. 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 company has a market cap of $6.16 billion, a PE ratio of 550.59, a price-to-earnings-growth ratio of 1.11 and a beta of 1.99. The firm has a fifty day moving average price of $35.23 and a two-hundred day moving average price of $40.66. Allegro MicroSystems has a fifty-two week low of $22.41 and a fifty-two week high of $71.77.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) last released its earnings results on Thursday, October 29th. The company reported $0.26 earnings per share for the quarter, beating the consensus estimate of $0.24 by $0.02. Allegro MicroSystems had a net margin of 1.50% and a return on equity of 8.30%. The business had revenue of $276.88 million during the quarter, compared to analysts' expectations of $270.86 million. During the same quarter last year, the company earned $0.13 earnings per share. The firm's revenue was up 29.2% on a year-over-year basis. Analysts expect that Allegro MicroSystems will post 0.65 EPS for the current year.

Insiders Place Their Bets

In other Allegro MicroSystems news, SVP Erin Hagen sold 2,285 shares of Allegro MicroSystems stock in a transaction that occurred on Monday, August 10th. The stock was sold at an average price of $44.39, for a total transaction of $101,431.15. Following the sale, the senior vice president directly owned 31,052 shares of the company's stock, valued at approximately $1,378,398.28. The trade was a 6.85% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Insiders own 0.50% of the company's stock.

Institutional Trading of Allegro MicroSystems

A number of large investors have recently bought and sold shares of the stock. BlackRock Inc. bought a new position in shares of Allegro MicroSystems in the second quarter valued at about $966,975,000. Dimensional Fund Advisors LP lifted its holdings in Allegro MicroSystems by 1.4% during the 1st quarter. Dimensional Fund Advisors LP now owns 2,170,487 shares of the company's stock worth $68,399,000 after buying an additional 30,340 shares in the last quarter. Bank of America Corp DE acquired a new position in Allegro MicroSystems during the 2nd quarter worth $64,171,000. Wellington Management Group LLP boosted its position in Allegro MicroSystems by 21.1% in the 2nd quarter. Wellington Management Group LLP now owns 814,937 shares of the company's stock valued at $56,736,000 after buying an additional 141,841 shares during the last quarter. Finally, Principal Financial Group Inc. boosted its position in Allegro MicroSystems by 2.8% in the 1st quarter. Principal Financial Group Inc. now owns 1,790,466 shares of the company's stock valued at $56,453,000 after buying an additional 48,170 shares during the last quarter. 56.45% of the stock is currently owned by institutional investors.

Key Allegro MicroSystems News

Here are the key news stories impacting Allegro MicroSystems this week:

• Positive Sentiment: Strong second-quarter results: Allegro reported revenue of approximately $277 million, up 29% year over year and ahead of the $271 million consensus estimate. EPS of $0.26 also exceeded expectations, while GAAP EPS quadrupled and non-GAAP EPS doubled from the prior year. Allegro MicroSystems Reports Second Quarter 2027 Results
• Positive Sentiment: Improving business trends: Record sales in the industrial, other and data-center categories, along with improving inventory levels, point to healthier demand and potentially better operating momentum. Allegro MicroSystems surprises with Q3 sales, inventory levels improve
• Positive Sentiment: Analyst remains bullish: Needham & Company maintained a “buy” rating and still sees substantial potential upside, indicating confidence in Allegro’s longer-term prospects despite reducing its price target. Needham analyst recommendation
• Neutral Sentiment: Long-term growth thesis: Conestoga initiated a position, citing rising chip content from vehicle electrification, driver-assistance systems and expanding automotive electronics. Conestoga SMid Cap Composite portfolio activity
• Negative Sentiment: Lower price target: Needham cut its target from $57 to $50. Although the firm retained its buy rating, the reduction may signal more cautious expectations and weigh on sentiment.
• Negative Sentiment: Elevated valuation: With the shares trading well below their 52-week high but at a reported P/E above 500, investors may be demanding stronger forward guidance or accelerating profitability. Allegro’s net margin was only 1.5%, which leaves limited room for execution disappointments.

Allegro MicroSystems Company Profile

Allegro MicroSystems, Inc is a semiconductor company that develops and manufactures magnetic sensing and power-management solutions. Its products are designed to help monitor motion, position, speed, current and temperature, as well as control power in electronic systems.

The company's portfolio includes Hall-effect and other magnetic sensors, current sensors, motor drivers, regulators, LED drivers and related integrated circuits. These products are used in automotive applications such as advanced driver-assistance systems, vehicle electrification, powertrain systems, comfort features and safety systems, as well as in industrial and consumer equipment.

Founded in 1990 and headquartered in Manchester, New Hampshire, Allegro serves customers globally through its international operations and distribution network.

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