📊 ALGM Key Takeaways
Is Allegro Microsystems, Inc.. (ALGM) a Good Investment?
ALGM demonstrates strong revenue growth (22.8% YoY) and solid gross margins (46.3%), with exceptional free cash flow generation ($124.9M). However, the company is currently unprofitable with insufficient operating income to cover debt service (0.8x interest coverage), indicating material profitability challenges requiring near-term resolution.
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.
Allegro Microsystems, Inc.. Key Strengths (ALGM)
- Strong revenue growth of 22.8% YoY with healthy gross margins of 46.3% demonstrating solid market demand and pricing power
- Exceptional free cash flow generation ($124.9M, 14% FCF margin) and strong operating cash flow despite net losses indicate underlying business fundamentals
- Fortress balance sheet with low leverage (0.29x debt/equity), excellent liquidity (3.45x current ratio), and $168.8M cash providing strategic flexibility
- 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
- Interest coverage ratio of 0.8x - operating income insufficient to service debt obligations, indicating unsustainable capital structure under current profitability
- Company unprofitable on net basis (-1.7% net margin) despite 46.3% gross margins, suggesting excessive operating expenses or elevated R&D spending that must normalize
- Operating margins extremely thin at 2.1% in cyclical semiconductor industry, leaving minimal buffer for demand fluctuations or competitive pressure
- 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 expansion and path to positive net profitability - must demonstrate margin leverage from revenue growth
- Interest coverage ratio trajectory - must improve above 1.0x to indicate operating income adequately covers debt service
- Working capital efficiency and free cash flow sustainability as revenue scales
- 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 3.45x 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 37% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.78 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 Grade of B from Claude (B) and ChatGPT (B) with 71% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALGM's key strengths?
Claude: Strong revenue growth of 22.8% YoY with healthy gross margins of 46.3% demonstrating solid market demand and pricing power. Exceptional free cash flow generation ($124.9M, 14% FCF margin) and strong operating cash flow despite net losses indicate underlying business fundamentals. 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: Interest coverage ratio of 0.8x - operating income insufficient to service debt obligations, indicating unsustainable capital structure under current profitability. Company unprofitable on net basis (-1.7% net margin) despite 46.3% gross margins, suggesting excessive operating expenses or elevated R&D spending that must normalize. 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 $890.1M.
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 $-0.08.
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 grade reflects both perspectives for balanced insights.
What is ALGM's fundamental grade?
Based on our AI fundamental analysis in June 2026, Allegro Microsystems, Inc.. has a B grade with 71% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ALGM stock overvalued or undervalued?
Valuation metrics for ALGM: ROE of -1.6% (sector avg: 22%), net margin of -1.7% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is ALGM's AI grade for 2026?
Our dual AI analysis gives Allegro Microsystems, Inc.. a combined B grade 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 $163.1M, with capital expenditures of $38.2M. FCF margin is 14.0%.
How does ALGM compare to other Technology stocks?
Vs Technology sector averages: Net margin -1.7% (avg: 18%), ROE -1.6% (avg: 22%), current ratio 3.45 (avg: 2.5).