📊 ALGM Key Takeaways
Is Allegro Microsystems, Inc.. (ALGM) a Good Investment?
Allegro Microsystems demonstrates solid cash generation and strong balance sheet fundamentals with 16.4% free cash flow margin and healthy liquidity ratios, but profitability has severely deteriorated with net margin of only 0.2% and operating margin of 2.0%, indicating operational challenges despite 46% gross margins. The company requires improved operational efficiency and margin expansion to justify investment confidence.
Allegro Microsystems shows a fundamentally mixed profile: cash generation remains solid, margins at the gross level are healthy, and the balance sheet is liquid with moderate leverage. However, earnings quality has weakened materially, with operating margin compressed to 2.0%, net income near break-even, and interest coverage below 1x, which limits confidence until profitability normalizes.
Why Buy Allegro Microsystems, Inc.. Stock? ALGM Key Strengths
- Strong free cash flow generation of $106.2M with 16.4% FCF margin demonstrates quality earnings
- Healthy balance sheet with $155.2M cash, conservative 0.29x debt-to-equity, and 3.65x current ratio
- Solid gross margin of 46% indicates pricing power and efficient manufacturing despite semiconductor sector challenges
- Strong liquidity with 3.65x current ratio and $155.19M in cash
- Positive operating cash flow and $106.19M of free cash flow support financial flexibility
- Healthy 46.0% gross margin indicates the core product mix still has solid underlying economics
ALGM Stock Risks: Allegro Microsystems, Inc.. Investment Risks
- Severe profitability compression with net margin of only 0.2% and operating margin of 2.0% despite healthy gross margins suggests high operating expenses or other operational issues
- Extremely weak returns on equity (0.2%) and assets (0.1%) indicate capital is not being deployed efficiently
- Interest coverage ratio of 0.8x is concerning and suggests operating income insufficient to cover debt service obligations
- Operating and net margins have compressed sharply, leaving the business barely profitable
- Interest coverage of 0.8x suggests current earnings are not comfortably covering financing costs
- Diluted EPS deterioration and very low ROE/ROA point to weak near-term earnings efficiency
Key Metrics to Watch
- Operating margin trend - need to see expansion from 2.0% current level
- Interest coverage ratio improvement - currently below 1.0x raises sustainability concerns
- Net margin progression - 0.2% is unsustainably low and must improve for long-term viability
- Operating margin recovery and net income conversion
- Interest coverage alongside operating cash flow consistency
Allegro Microsystems, Inc.. (ALGM) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 3.65x current ratio provides a solid financial cushion.
ALGM Profit Margin, ROE & Profitability Analysis
ALGM vs Technology Sector: How Allegro Microsystems, Inc.. Compares
How Allegro Microsystems, Inc.. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Allegro Microsystems, Inc.. Stock Overvalued? ALGM Valuation Analysis 2026
Based on fundamental analysis, Allegro Microsystems, Inc.. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Allegro Microsystems, Inc.. Balance Sheet: ALGM Debt, Cash & Liquidity
ALGM Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Allegro Microsystems, Inc..'s revenue has grown significantly by 61% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.97 reflects profitable operations.
ALGM Revenue Growth, EPS Growth & YoY Performance
ALGM Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $177.9M | $1.6M | $0.01 |
| Q3 2025 | $177.9M | -$6.9M | $-0.04 |
| Q2 2025 | $187.4M | $6.5M | $0.03 |
| Q1 2025 | $166.9M | -$13.2M | $-0.07 |
| Q3 2024 | $186.6M | $33.3M | $0.17 |
| Q2 2024 | $237.7M | $50.6M | $0.26 |
| Q1 2024 | $217.8M | $10.2M | $0.05 |
| Q3 2023 | $186.6M | $32.9M | $0.17 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Allegro Microsystems, Inc.. Dividends, Buybacks & Capital Allocation
ALGM SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Allegro Microsystems, Inc.. (CIK: 0000866291)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ALGM
What is the AI rating for ALGM?
Allegro Microsystems, Inc.. (ALGM) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 68% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALGM's key strengths?
Claude: Strong free cash flow generation of $106.2M with 16.4% FCF margin demonstrates quality earnings. Healthy balance sheet with $155.2M cash, conservative 0.29x debt-to-equity, and 3.65x current ratio. ChatGPT: Strong liquidity with 3.65x current ratio and $155.19M in cash. Positive operating cash flow and $106.19M of free cash flow support financial flexibility.
What are the risks of investing in ALGM?
Claude: Severe profitability compression with net margin of only 0.2% and operating margin of 2.0% despite healthy gross margins suggests high operating expenses or other operational issues. Extremely weak returns on equity (0.2%) and assets (0.1%) indicate capital is not being deployed efficiently. ChatGPT: Operating and net margins have compressed sharply, leaving the business barely profitable. Interest coverage of 0.8x suggests current earnings are not comfortably covering financing costs.
What is ALGM's revenue and growth?
Allegro Microsystems, Inc.. reported revenue of $646.9M.
Does ALGM pay dividends?
Allegro Microsystems, Inc.. pays dividends, with $0.0M distributed to shareholders in the trailing twelve months.
Where can I find ALGM SEC filings?
Official SEC filings for Allegro Microsystems, Inc.. (CIK: 0000866291) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ALGM's EPS?
Allegro Microsystems, Inc.. has a diluted EPS of $0.01.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ALGM a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Allegro Microsystems, Inc.. has a HOLD rating with 68% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is ALGM stock overvalued or undervalued?
Valuation metrics for ALGM: ROE of 0.2% (sector avg: 22%), net margin of 0.2% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy ALGM stock in 2026?
Our dual AI analysis gives Allegro Microsystems, Inc.. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ALGM's free cash flow?
Allegro Microsystems, Inc..'s operating cash flow is $127.4M, with capital expenditures of $21.2M. FCF margin is 16.4%.
How does ALGM compare to other Technology stocks?
Vs Technology sector averages: Net margin 0.2% (avg: 18%), ROE 0.2% (avg: 22%), current ratio 3.65 (avg: 2.5).