Allegro MicroSystems (NASDAQ:ALGM) Stock Falls 10.8% After Analyst Downgrade

Allegro MicroSystems, Inc. (NASDAQ:ALGM) traded down 10.8% during trading on Thursday after Wells Fargo & Company lowered their price target on the stock from $45.00 to $40.00. Wells Fargo & Company currently has an overweight rating on the stock. Allegro MicroSystems traded as low as $32.20 and last traded at $31.5550. 492,638 shares traded hands during trading, a decline of 81% from the average daily volume of 2,609,451 shares. The stock had previously closed at $35.37.

ALGM has been the topic of several other research reports. Benchmark began coverage on Allegro MicroSystems in a report on Wednesday, August 12th. They set a “buy” rating and a $60.00 price objective on the stock. TD Cowen dropped their target price on shares of Allegro MicroSystems from $48.00 to $40.00 and set a “buy” rating on the stock in a research report on Monday, October 19th. Needham & Company LLC dropped their target price on shares of Allegro MicroSystems from $57.00 to $50.00 and set a “buy” rating on the stock in a research report on Thursday. Barclays cut their price target on shares of Allegro MicroSystems from $48.00 to $45.00 and set an “equal weight” rating on the stock in a report on Friday. Finally, Royal Bank Of Canada initiated coverage on shares of Allegro MicroSystems in a research report on Friday, October 2nd. They issued an “outperform” rating and a $50.00 price target for the company. One equities research analyst has rated the stock with a Strong Buy rating, ten have issued a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $49.33.

Insider Buying and Selling at Allegro MicroSystems

In other 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 value 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 can be accessed through this link. 0.50% of the stock is owned by corporate insiders.

More Allegro MicroSystems News

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

• Positive Sentiment: Allegro reported second-quarter fiscal 2027 revenue of approximately $277 million, up 29% year over year and ahead of the roughly $271 million consensus estimate. Adjusted earnings were $0.26 per share, exceeding expectations, while GAAP EPS quadrupled and non-GAAP EPS doubled from the prior-year period. Allegro MicroSystems Reports Second Quarter 2027 Results
• Positive Sentiment: Management highlighted record sales in industrial and other markets and data centers, along with improving inventory levels, stronger demand signals and ongoing design wins. These trends support the longer-term growth outlook, particularly in electrification, automation and data-center applications. ALGM Q3 Deep Dive
• Neutral Sentiment: Analysts remain broadly constructive, but several firms reduced their targets after the results: Wells Fargo to $40 from $45, UBS to $48 from $50, Barclays to $45 from $48, Mizuho to $46 from $58 and Needham to $50 from $57. Ratings remained positive or neutral, indicating expectations were reset rather than fully reversed. Analysts Cut Their Forecasts on Allegro MicroSystems
• Negative Sentiment: The stock’s decline reflects concerns that near-term demand may not be strong enough to justify prior valuation assumptions. Investors are also weighing capacity constraints, the pace of recovery across end markets and the possibility that the earnings beat will not translate into a materially higher outlook. Allegro MicroSystems Sinks Despite Earnings Beat

Hedge Funds Weigh In On Allegro MicroSystems

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

Allegro MicroSystems Price Performance

The company has a debt-to-equity ratio of 0.28, a current ratio of 4.13 and a quick ratio of 2.33. The stock’s 50 day moving average price is $35.09 and its two-hundred day moving average price is $40.66. The firm has a market capitalization of $5.69 billion, a price-to-earnings ratio of 203.55, a PEG ratio of 1.04 and a beta of 1.99.

Allegro MicroSystems (NASDAQ:ALGM) last posted its earnings results on Thursday, October 29th. The company reported $0.26 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.24 by $0.02. The business had revenue of $276.88 million for the quarter, compared to analyst estimates of $270.86 million. Allegro MicroSystems had a net margin of 3.07% and a return on equity of 10.34%. Allegro MicroSystems’s revenue was up 29.2% compared to the same quarter last year. During the same period last year, the business posted $0.13 EPS. On average, equities research analysts anticipate that Allegro MicroSystems, Inc. will post 0.65 EPS for the current year.

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.