Allegro MicroSystems, Inc. (ALGM) - Stock Analysis
Last updated: Jan 18, 2026
Research Idea
Research content for general circulation. Not individualized advice. Methodology & Disclosures
Compelling near-term opportunity driven by robust revenue (+22% YoY), innovative AI and power-efficient semiconductor product launches, positive technical momentum (+10.8% on strong volume), and improving financial health with strong liquidity and growing margins. Positioned well amid AI infrastructure demand with key product and earnings catalysts upcoming.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ⢠Strong liquidity ⢠Annual operating loss ⢠Elevated valuation Allegro shows strong liquidity and low leverage with healthy gross margins, but uneven profitability, high R&D/intangible exposure, and very rich valuation relative to current earnings create significant execution risk.
Price Behavior
Key Price Behavior Insights: ⢠Higher highs ⢠Higher lows ⢠Rapid breakout Support Level: $30.00â$31.00 Resistance Level: $33.35 ALGM has shown clear upward momentum last month with a breakout from ~$27â29 into a rally to ~$33.35, repeatedly making higher highs/lows but now vulnerable to short-term pullbacks if it becomes overbought.
Sentiment & News
Key News Insights: ⢠SiC gate drivers ⢠Ultra-low loss sensor ⢠Double-digit rallies Allegro's new SiC gate drivers and low-loss current sensor spurred investor enthusiasm with double-digit stock jumps, underscoring momentum in EV and AI power solutions ahead of its Jan 29 earnings and Feb 18 Analyst Day.
AI Summary
Allegro has shifted from a turnaround to a productâled growth story where the stock is pricing optionality on SiC/GaN and AI/datacenter design winsâso you're effectively buying execution on commercialization and margin expansion rather than nearâterm GAAP profits. The key actionable risk: monitor sellâthrough vs. sellâin, product revenue mix (EV vs. datacenter), and utilization/margin progress at Analyst Day and upcoming quartersâfailure to convert design wins into sustained higherâmargin volume would quickly make the current valuation look stretched.
Description
Allegro MicroSystems designs, manufactures and sells sensor and application-specific analog power integrated circuits for motion-control and energy-efficient systems, including magnetic sensors, motor and power-management ICs, and photonic/3D sensing components for LiDAR. It serves OEMs and suppliers in the automotive and industrial sectors through direct sales, distributors, independent representatives and consignment across the Americas, Europe and Asia. Founded in 1990 and headquartered in Manchester, New Hampshire, the company is a subsidiary of Sanken Electric Co., Ltd.
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| Jan 8 | Jan 15 | ALGM | Allegro MicroSystems, Inc. | Compelling near-term opportunity driven by robust revenue (+22% YoY), innovative AI and power-efficient semiconductor product launches, positive technical momentum (+10.8% on strong volume), and improving financial health with strong liquidity and growing margins. Positioned well amid AI infrastructure demand with key product and earnings catalysts upcoming. | Closed | +4.4% |