Allegro MicroSystems (NASDAQ:ALGM) Releases Earnings Results, Beats Expectations By $0.02 EPS

Allegro MicroSystems (NASDAQ:ALGM) announced its quarterly earnings results on Thursday. The company reported $0.26 earnings per share for the quarter, beating analysts’ consensus estimates of $0.24 by $0.02, FiscalAI reports. The business had revenue of $276.88 million during the quarter, compared to analysts’ expectations of $270.86 million. Allegro MicroSystems had a return on equity of 8.30% and a net margin of 1.50%. The business’s revenue for the quarter was up 29.2% on a year-over-year basis. During the same quarter last year, the business posted $0.13 earnings per share.

Here are the key takeaways from Allegro MicroSystems’ conference call:

• Strong Q2 performance: Sales rose 29% year over year to $277 million, exceeding the high end of guidance, while non-GAAP EPS doubled to $0.26. Allegro reported its seventh consecutive quarter of sequential sales growth.
• Demand indicators remain robust: Design wins increased nearly 40% year over year, bookings rose 45%, and backlog expanded across automotive and industrial markets. Management said these trends put the company ahead of its mid-teens long-term sales growth target.
• Data center growth opportunity is expanding: Data center sales reached a record $46 million, up more than 150% year over year, with more than 10 new current-sensor wins for hyperscaler power systems. Management expects fiscal 2027 data center revenue to more than double, although some 800-volt programs were pushed out by one or two quarters.
• Automotive and robotics momentum is strong: Automotive sales grew 11% year over year, with more than 75% of new automotive design wins in xEV and ADAS applications. Allegro also secured humanoid robotics wins, including a program requiring approximately 60 ICs per robot, and will begin sampling an integrated sensor and motor-driver chip for robotic hands in fiscal Q3.
• Capacity and cost pressures remain: Back-end test capacity is beginning to tighten, prompting additional capacity investments in fiscal Q3 and Q4, while wafer supply remains adequate. Input costs, including wafer, energy, labor, and commodities, continue to rise, though pricing actions, manufacturing efficiencies, and operating leverage are expected to support gross-margin expansion toward the company’s greater-than-55% target.

Allegro MicroSystems Price Performance

NASDAQ ALGM opened at $33.03 on Friday. Allegro MicroSystems has a 52 week low of $22.41 and a 52 week high of $71.77. The company has a 50-day moving average price of $35.23 and a two-hundred day moving average price of $40.66. The company has a current ratio of 3.70, a quick ratio of 2.33 and a debt-to-equity ratio of 0.30. The stock has a market cap of $6.16 billion, a price-to-earnings ratio of 550.59, a price-to-earnings-growth ratio of 1.11 and a beta of 1.99.

Analyst Ratings Changes

ALGM has been the subject of several recent research reports. Morgan Stanley raised their target price 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. Wall Street Zen upgraded shares of Allegro MicroSystems from a “hold” rating to a “buy” rating in a research report on Sunday, August 2nd. Mizuho decreased their target price on shares of Allegro MicroSystems from $67.00 to $58.00 and set an “outperform” rating on the stock in a research report on Friday, July 31st. Benchmark assumed coverage on Allegro MicroSystems in a report on Wednesday, August 12th. They issued a “buy” rating and a $60.00 price target for the company. Finally, Royal Bank Of Canada assumed coverage on Allegro MicroSystems in a research note on Friday, October 2nd. They set an “outperform” rating and a $50.00 price target for the company. One investment analyst has rated the stock with a Strong Buy rating, ten have given a Buy rating, one has given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $51.00.

More Allegro MicroSystems News

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

• Positive Sentiment: Allegro reported fiscal Q2 2027 revenue of approximately $277 million, up 29% year over year and ahead of analysts’ $270.86 million estimate. EPS of $0.26 also exceeded the $0.24 consensus, while earnings doubled or quadrupled year over year depending on the measure used. Allegro MicroSystems Reports Second Quarter 2027 Results
• Positive Sentiment: Record sales in Allegro’s Industrial & Other and Data Center businesses point to improving demand beyond its automotive end market. Inventory levels also improved, supporting the company’s operating recovery. Allegro MicroSystems surprises with sales, inventory levels improve
• Positive Sentiment: Needham & Company maintained a “buy” rating, implying confidence in the long-term outlook and identifying substantial potential upside despite lowering its target. Needham analyst recommendations
• Neutral Sentiment: Management’s earnings call and the introduction of power and cooling solutions for sustainable 800V AI data centers highlight Allegro’s efforts to expand its exposure to electrification and data-center infrastructure. Allegro Q2 2027 earnings call transcript
• Negative Sentiment: Needham cut its price target from $57 to $50 while retaining a buy rating. The reduction may have pressured the stock by signaling that near-term expectations or valuation risks remain elevated, even after the earnings beat. Benzinga analyst target update

Insider Activity

In related news, SVP Erin Hagen sold 2,285 shares of the stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $44.39, for a total transaction of $101,431.15. Following the completion of the sale, the senior vice president directly owned 31,052 shares of the company’s stock, valued at $1,378,398.28. This represents a 6.85% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. 0.50% of the stock is owned by corporate insiders.

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.