Allegro MicroSystems has posted 26% year-over-year revenue growth with a 9 out of 9 Piotroski financial health score, but the stock has climbed above the analyst consensus price target, leaving no upside buffer and a negative reward-to-risk ratio; concentrated exposure to automotive OEM customers (70.6% of revenues) and high short interest at 12% against 131% implied volatility create a setup that warrants avoiding new entry until a positive reward-to-risk spread re-opens.
Thesis pillars
- Strong Revenue Growth Trajectory→Stable
- Automotive Oem Concentration Risk↓Deteriorating
- Price Above Analyst Target No Upside↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Allegro MicroSystems, Inc. (ALGM) Stock Analysis
Range Bound setup
Technology · Semiconductors
Hold if already holding. Not a fresh buy at $44.65, but acceptable to hold if already in. Reasons: Concentration risk — Customer: automotive OEM supply chain customers (70.6%); Thin upside margin: 7.5%.
Allegro MicroSystems designs and markets sensor ICs and power ICs for automotive and industrial markets, shipping roughly 2.1 billion units annually to more than 15,000 customers. Automotive customers—primarily suppliers to OEMs—accounted for 70.6% of FY2026 net sales. The... Read more
Hold if already holding. Not a fresh buy at $44.65, but acceptable to hold if already in. Reasons: Concentration risk — Customer: automotive OEM supply chain customers (70.6%); Thin upside margin: 7.5%. Chart setup: RSI 41 mid-range, Bollinger mid-band. Maintain position. Not compelling to add more. Score 6.2/10, moderate confidence.
Passes 5/7 gates (positive momentum, clean insider activity, earnings proximity 76d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
About Allegro MicroSystems, Inc.
About Allegro MicroSystems, Inc.
Allegro MicroSystems designs magnetic sensor ICs and power ICs primarily for automotive and industrial end-markets, with customers supplying automotive OEMs accounting for 70.6% of fiscal year 2026 net sales — down from 73.8% in fiscal year 2025. The company ships roughly 2.1 billion units annually across a portfolio exceeding 1,500 products to more than 15,000 customers worldwide, operating a fabless manufacturing model that sources wafer fabrication from external foundries including TSMC, UMC, Tower Semiconductor, and Polar.
Allegro MicroSystems generates revenue from two product families: magnetic sensor ICs — including Hall-effect, GMR, and TMR current, position, angle, and speed sensors — and power ICs including motor drivers, voltage regulators, isolated gate drivers, and power management ICs. The automotive segment covers xEV powertrains and ADAS steering and braking systems, where the transition to electro-mechanical braking and steer-by-wire architectures is expected to increase semiconductor content per vehicle over time. Industrial revenue is growing in AI data center cooling and power supply applications, factory automation, and robotics. Products are sold through a direct salesforce, distributors, and independent sales representatives globally. Competitors include larger semiconductor companies with internal wafer fabrication capabilities and greater resources for AI-accelerated product development. ASPs face structural price erosion characteristic of the analog semiconductor market. Allegro plans to continue aligning R&D investment toward xEV, ADAS, data center, and robotics applications through disciplined return-on-investment evaluation.
Show full overview
Allegro MicroSystems sources wafer fabrication primarily from four foundry partners — UMC, Polar, Tower Semiconductor, and TSMC — with two of these facilities in Taiwan, a region exposed to earthquake risk and China-Taiwan geopolitical tensions that could disrupt supply. Internal assembly and testing is concentrated at AMPI in the Philippines, where disruption could materially impair the company's ability to test and deliver products. Chinese export restrictions on rare-earth elements including samarium, used in magnetic sensing applications, may restrict sourcing of materials critical to certain product lines if alternative suppliers cannot be qualified.
See also: Technology · Semiconductors
From Allegro MicroSystems, Inc.'s most recent 10-K filing, extracted June 9, 2026.
Recent developments
updated 2026-08-15Recent Developments — Allegro MicroSystems, Inc.
Latest news
- NEWS Allegro MicroSystems (ALGM) Reports Earnings Tomorrow: What To Expect - StockStory — StockStory neutral
- NEWS Allegro MicroSystems (ALGM) Reports Earnings Tomorrow: What To Expect - TradingView — TradingView neutral
- NEWS Allegro MicroSystems (ALGM) Reports Earnings Tomorrow: What To Expect - FinancialContent — FinancialContent neutral
- NEWS Allegro Microsystems Inc (ALGM) Shares Fall 4.9% -- What GF Scor - GuruFocus — GuruFocus negative
- NEWS Allegro Microsystems Inc (ALGM) Shares Fall 4.9% -- What GF Score of 79 Tells Investors - GuruFocus — GuruFocus negative
Generated 2026-08-15T10:37:18Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerautomotive OEM supply chain customers71%10-K Item 1A: 'Our customers that supply various systems and components to automotive OEMs accounted for 70.6%...of our total net sales in fiscal years 2026, 2025, and 2024, respectively.'
- MEDIUMSupplierthird-party wafer fabrication facilities10-K Item 1A: 'We currently rely on a limited number of third-party wafer fabrication facilities for the fabrication of semiconductor wafers'
- MEDIUMSupplierAMPI assembly and test facility10-K Item 1A: 'We rely heavily on the manufacturing operations at AMPI, which operates as our primary internal assembly and testing facility.'
Material Events(8-K, last 90d)
- 2026-05-13Item 5.02LOWDirectors Susan D. Lynch and Richard R. Lury notified the Board on May 11 and 13, 2026, respectively, of decisions not to stand for reelection at the 2026 Annual Meeting on August 5, 2026. Robert J. Willett elected to the Board as Class III Director, appointed to Audit and Compensation Committees. No disagreement cited.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
Rating Breakdown
1 ceiling hit
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $44.65, but acceptable to hold if already in. Reasons: Concentration risk — Customer: automotive OEM supply chain customers (70.6%); Thin upside margin: 7.5%. Chart setup: RSI 41 mid-range, Bollinger mid-band. Maintain position. Not compelling to add more. Target $47.70 (+6.8%), stop $41.28 (−8.2%), A.R:R 0.5:1. Score 6.2/10, moderate confidence.
Take-profit target: $47.70 (+7.5% upside). Target $47.70 (+6.8%), stop $41.28 (−8.2%), A.R:R 0.5:1. Stop-loss: $41.28.
Concentration risk — Customer: automotive OEM supply chain customers (70.6%); Thin upside margin: 7.5%; Elevated risk factors.
Allegro MicroSystems, Inc. trades at a P/E of 630.4 (forward 29.4). TrendMatrix value score: 5.7/10. Verdict: Hold.
17 analysts cover ALGM with a consensus score of 4.2/5. Average price target: $55.
What does Allegro MicroSystems, Inc. do?Allegro MicroSystems designs and markets sensor ICs and power ICs for automotive and industrial markets, shipping...
Allegro MicroSystems designs and markets sensor ICs and power ICs for automotive and industrial markets, shipping roughly 2.1 billion units annually to more than 15,000 customers. Automotive customers—primarily suppliers to OEMs—accounted for 70.6% of FY2026 net sales. The company operates under a fabless model, sourcing wafer fabrication from UMC, Polar, Tower, and TSMC.