Barclays Has Lowered Expectations for Allegro MicroSystems (NASDAQ:ALGM) Stock Price

Key Points

• Barclays cut Allegro MicroSystems’ price target from $48 to $45 while maintaining an “equal weight” rating, implying 46.12% upside from the previous close.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and average price target of $49.75, despite target reductions from several firms including Mizuho and Needham.
• Allegro reported better-than-expected quarterly results, with revenue up 29% year over year and EPS of $0.26 versus the $0.24 consensus estimate. However, shares fell 6.8% and continue to trade below their 50-day and 200-day moving averages amid a very high reported P/E ratio.

Allegro MicroSystems (NASDAQ:ALGM - Get Free Report) had its price target decreased by stock analysts at Barclays from $48.00 to $45.00 in a report released on Friday, Benzinga reports. The firm presently has an "equal weight" rating on the stock. Barclays's price target suggests a potential upside of 46.12% from the company's previous close.

ALGM has been the topic of a number of other reports. Morgan Stanley lifted their price objective on shares of Allegro MicroSystems from $51.00 to $52.00 and gave the company an "overweight" rating in a research note on Friday, July 31st. TD Cowen reduced their target price on Allegro MicroSystems from $48.00 to $40.00 and set a "buy" rating for the company in a report on Monday, October 19th. Mizuho dropped their price objective on Allegro MicroSystems from $58.00 to $46.00 and set an "outperform" rating for the company in a research note on Friday. Benchmark began coverage on shares of Allegro MicroSystems in a report on Wednesday, August 12th. They issued a "buy" rating and a $60.00 target price on the stock. Finally, Needham & Company LLC reduced their target price on Allegro MicroSystems from $57.00 to $50.00 and set a "buy" rating on the stock in a report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, one has given a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Allegro MicroSystems presently has a consensus rating of "Moderate Buy" and an average target price of $49.75.

Allegro MicroSystems Trading Down 6.8%

Shares of Allegro MicroSystems stock opened at $30.80 on Friday. Allegro MicroSystems has a twelve month low of $22.41 and a twelve month high of $71.77. The business has a 50-day moving average price of $35.23 and a 200-day moving average price of $40.66. The firm has a market cap of $5.74 billion, a price-to-earnings ratio of 520.54, a PEG ratio of 1.11 and a beta of 1.99. The company has a quick ratio of 2.33, a current ratio of 3.70 and a debt-to-equity ratio of 0.30.

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

Insider Activity

In other news, SVP Erin Hagen sold 2,285 shares of the firm's stock in a transaction 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 transaction, the senior vice president directly 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 ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders own 0.50% of the company's stock.

Hedge Funds Weigh In On Allegro MicroSystems

A number of hedge funds have recently modified their holdings of the stock. Parallel Advisors LLC increased its position in Allegro MicroSystems by 42.8% during the first quarter. Parallel Advisors LLC now owns 1,008 shares of the company's stock worth $32,000 after acquiring an additional 302 shares during the period. SBI Securities Co. Ltd. raised its holdings in Allegro MicroSystems by 17.4% in the 3rd quarter. SBI Securities Co. Ltd. now owns 2,059 shares of the company's stock valued at $75,000 after acquiring an additional 305 shares in the last quarter. Signaturefd LLC lifted its position in shares of Allegro MicroSystems by 51.3% in the 3rd quarter. Signaturefd LLC now owns 1,070 shares of the company's stock worth $39,000 after acquiring an additional 363 shares during the period. Transamerica Financial Advisors LLC acquired a new position in shares of Allegro MicroSystems in the second quarter valued at $27,000. Finally, Rakuten Securities Inc. bought a new position in Allegro MicroSystems in the second quarter worth $31,000. 56.45% of the stock is currently owned by institutional investors and hedge funds.

Allegro MicroSystems News Roundup

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

• Positive Sentiment: Allegro reported second-quarter revenue of approximately $277 million, up 29% year over year and ahead of the $270.86 million consensus estimate. EPS of $0.26 also topped expectations of $0.24 and doubled from $0.13 a year earlier. Allegro MicroSystems Reports Second Quarter 2027 Results
• Positive Sentiment: Record sales in the industrial and other businesses, as well as data-center growth, helped drive the quarter. GAAP EPS quadrupled year over year, indicating substantial operating improvement despite the company’s still-low 1.50% net margin. Allegro MicroSystems surprises with Q3 sales
• Positive Sentiment: Improving inventory levels could support more balanced supply-chain conditions and reduce a prior overhang on customer demand. Separately, Conestoga SMid Cap initiated a position, citing rising chip content from vehicle electrification, driver-assistance systems and other automotive electronics.
• Neutral Sentiment: Mizuho retained an “outperform” rating and Needham retained a “buy” rating, indicating that analysts still see meaningful long-term upside. However, both firms reduced their targets: Mizuho cut its target from $58 to $46, while Needham lowered its target from $57 to $50. Analysts cut forecasts after Q2 results
• Negative Sentiment: The price-target cuts are likely offsetting the earnings beat and signaling that analysts believe some of Allegro’s expected growth is already reflected in the valuation. With the shares trading well below their 50-day and 200-day moving averages and at a very high reported price-to-earnings ratio, investors may remain cautious despite the improved results.

About Allegro MicroSystems

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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