Allegro Microsystems, Inc. (NASDAQ: ALGM)

Sector: Technology Industry: Semiconductors CIK: 0000866291
Market Cap 7.87 Bn
P/B 8.17
P/E -595.57
P/S 9.37
ROIC (Qtr) -0.18
Div Yield % 0.00
Rev 1y % (Qtr) 28.86
Total Debt (Qtr) 308.19 Mn
Debt/Equity (Qtr) 0.32
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About

Allegro Microsystems, Inc., known by its ticker symbol ALGM, is a prominent player in the global semiconductor industry. The company specializes in the design, development, and marketing of sensor integrated circuits (ICs) and application-specific analog power ICs. Its mission is to lead in semiconductor sensing and power solutions for motion control and energy-efficient systems in automotive and industrial applications, contributing to a safer and more sustainable future. Allegro Microsystems' primary business activities revolve around the magnetic...

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Investment thesis

Bull case

  • Strong operating cash flow of 147.71M provides robust 0.48x coverage of total debt 308.19M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 163.40M provide 22x coverage of short-term debt 7.43M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 147.71M provides exceptional 581.53x coverage of minority interest expenses 254000, showing strong core operations.
  • Strong tangible asset base of 974.38M provides 3.16x coverage of total debt 308.19M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 121.16M exceeds capital expenditure of 26.55M by 4.56x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 147.71M barely covers its investment activities of (27.73M), with a coverage ratio of -5.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (27.73M) provide weak support for R&D spending of 197.89M, which is -0.14x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • The company's operating cash flow of 147.71M shows concerning coverage of stock compensation expenses of 46.88M, with a 3.15 ratio indicating potential earnings quality issues.
  • Operating cash flow of 147.71M provides minimal -8.35x coverage of tax expenses of (17.70M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (7.03M) show weak coverage of depreciation charges of 65.75M, with a -0.11 ratio indicating high capital intensity and potential reinvestment needs.

Customer Breakdown of Revenue (2025)

Product and Service Breakdown of Revenue (2025)

Peer comparison

Companies in the Semiconductors
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NVDA Nvidia Corp 4,081.81 Bn 2,078.31 541.21 10.48 Bn
2 TSM Taiwan Semiconductor Manufacturing Co Ltd 1,887.11 Bn 425.89 133.83 31.18 Bn
3 AVGO Broadcom Inc. 1,662.70 Bn -332,540.00 1,106.25 65.14 Bn
4 MU Micron Technology Inc 426.40 Bn 109.53 25.16 12.43 Bn
5 AMD Advanced Micro Devices Inc 329.72 Bn 76.06 9.52 3.85 Bn
6 TXN Texas Instruments Inc 224.64 Bn 55.45 14.64 14.05 Bn
7 INTC Intel Corp 205.50 Bn -769.67 3.89 46.59 Bn
8 QCOM Qualcomm Inc/De 153.04 Bn 28.53 3.41 14.82 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.66 4.34
EV to Cash from Ops. EV/CFO 54.49 -208.66
EV to Debt EV to Debt 26.12 79.86
EV to EBIT EV/EBIT -1,144.43 709.44
EV to EBITDA EV/EBITDA 122.64 250.41
EV to Free Cash Flow [EV/FCF] EV/FCF 66.43 403.96
EV to Market Cap EV to Market Cap 1.02 0.75
EV to Revenue EV/Rev 9.58 61.40
Price to Book Value [P/B] P/B 8.17 52.11
Price to Earnings [P/E] P/E -595.57 -5,067.15
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 2.41
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -3.82
Dividend per Basic Share Div per Share (Qtr) 0.00 0.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 20.71
Interest Coverage Int. cover (Qtr) -0.29 8.87
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 45.63 -164.54
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 9.69 64.06
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.42
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 89.18 60.52
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -17.66 86.38
EBIT Growth (1y) % EBIT 1y % (Qtr) 67.07 52.71
EBT Growth (1y) % EBT 1y % (Qtr) 38.47 57.92
EPS Growth (1y) % EPS 1y % (Qtr) 80.00 65.33
FCF Growth (1y) % FCF 1y % (Qtr) 2,107.67 109.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.47 27.07
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.59 0.50
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.09
Cash Ratio Cash Ratio (Qtr) 1.16 2.55
Current Ratio Curr Ratio (Qtr) 3.65 5.58
Debt to Equity Ratio Debt/Equity (Qtr) 0.32 0.30
Interest Cover Ratio Int Coverage (Qtr) -0.29 8.87
Times Interest Earned Times Interest Earned (Qtr) -0.29 8.87
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.00 -115.40
EBIT Margin % EBIT Margin % (Qtr) -0.84 -94.51
EBT Margin % EBT Margin % (Qtr) -3.68 -136.09
Gross Margin % Gross Margin % (Qtr) 45.00 47.45
Net Profit Margin % Net Margin % (Qtr) -1.60 -137.24