Allegro Microsystems, Inc. (ALGM) Stock Analysis and Metrics

Sector: Technology Industry: Semiconductors CIK: 0000866291

P/B 5.43

P/E -180.73

P/S 6.50

Market Cap 5.13 Bn

ROIC (Qtr) 1.82

Div Yield % 0.00

Rev 1y % (Qtr) 14.36

Total Debt (Qtr) 308.70 Mn

Debt/Equity (Qtr) 0.33

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...

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 sensor and power management IC markets. The company operates on a global scale, with a presence in various regions, including the Americas, Europe, and Asia. Its main offerings include sensor ICs, power ICs, and motor driver ICs, which enable customers to accurately measure motion, speed, position, and current.

The company's revenue is generated through its primary products, which cater to a wide range of applications. In the automotive market, Allegro Microsystems provides magnetic sensor ICs for powertrain efficiency, advanced driver assistance systems (ADAS), and autonomous vehicles. Its products are used in position sensing, speed sensing, and current sensing applications, ensuring high accuracy and reliability. In the industrial market, the company offers solutions for clean energy, automation, and motion control, with its products used in solar power systems, wind turbines, and industrial automation systems.

Allegro Microsystems enjoys a strong competitive position in the industry, particularly in the magnetic sensor IC market. Its products are used by many of the world's top automotive and industrial companies, and it maintains a solid track record of innovation and customer satisfaction. The company's customer base includes a diverse mix of companies from the automotive and industrial sectors.

In terms of products, Allegro Microsystems offers a portfolio of integrated magnetic sensor ICs, which includes current sensor ICs, position sensor ICs, and speed sensor ICs. These products cater to various applications in the automotive, industrial, and consumer markets. The company's magnetic sensor ICs are designed for high accuracy and reliability in position sensing, speed sensing, and current sensing applications.

Allegro Microsystems' power IC portfolio includes high-temperature and high-voltage capable motor driver ICs, regulator power management ICs, LED driver ICs, and high-voltage isolated gate drivers. These products are designed for applications in motor control, power management, and LED lighting, offering high efficiency, reliability, and flexibility.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 126.81M provide 17.30x coverage of short-term debt 7.33M, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 929.93M provides 3.01x coverage of total debt 308.70M, indicating robust asset backing and low credit risk.
Operating cash flow of 94.15M provides exceptional 373.61x coverage of minority interest expenses 252000, showing strong core operations.
Robust free cash flow of 58.10M exceeds capital expenditure of 36.05M by 1.61x, indicating strong organic growth funding capability.
Cash position of 126.81M provides exceptional 503.23x coverage of minority interest expenses 252000, indicating strong liquidity.

Cons

Operating cash flow of 94.15M barely covers its investment activities of (36.91M), with a coverage ratio of -2.55, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of (36.91M) provide weak support for R&D spending of 188.33M, which is -0.20x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
The company's operating cash flow of 94.15M shows concerning coverage of stock compensation expenses of 44.65M, with a 2.11 ratio indicating potential earnings quality issues.
Operating cash flow of 94.15M provides minimal -8.86x coverage of tax expenses of (10.63M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
Operating earnings of (12.28M) show weak coverage of depreciation charges of 64.87M, with a -0.19 ratio indicating high capital intensity and potential reinvestment needs.

Peer Comparison

Companies in the Semiconductors

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NVDA	Nvidia Corp	4,276.26 Bn	43.11	22.85	10.48 Bn
2	AVGO	Broadcom Inc.	1,690.87 Bn	89.31	28.22	64.23 Bn
3	TSM	Taiwan Semiconductor Manufacturing Co Ltd	1,514.32 Bn	29.36	12.71	31.18 Bn
4	AMD	Advanced Micro Devices Inc	343.27 Bn	103.83	10.72	3.87 Bn
5	MU	Micron Technology Inc	269.16 Bn	31.52	7.20	15.28 Bn
6	INTC	Intel Corp	249.55 Bn	1,260.33	4.67	46.55 Bn
7	QCOM	Qualcomm Inc/De	195.62 Bn	35.30	4.42	14.81 Bn
8	TXN	Texas Instruments Inc	163.92 Bn	32.50	9.49	14.05 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	3.85	3.95
EV to Cash from Ops.	56.53	-331.60
EV to Debt	17.24	86.14
EV to EBIT	-433.63	-55.96
EV to EBITDA	96.54	20.88
EV to Free Cash Flow [EV/FCF]	91.61	-4.09
EV to Market Cap	1.04	0.80
EV to Revenue	6.75	18.79
Price to Book Value [P/B]	5.43	5.23
Price to Earnings [P/E]	-180.73	12.47

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	2.29
Dividend Payout Ratio %	0.00	8.00
Dividend per Basic Share	0.00	0.62
FCF Dividend Payout Ratio %	0.00	10.38
Interest Coverage	-0.46	8.19

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	48.22	-155.77
Cash and Equivalents Growth (1y) %	-36.29	44.44
Dividend Growth (1y) %	0.00	5.30
EBIAT Growth (1y) %	-111.88	34.22
EBITDA Growth (1y) %	-54.24	47.50
EBIT Growth (1y) %	-165.61	30.14
EBT Growth (1y) %	-523.40	47.04
EPS Growth (1y) %	-7.14	36.18
FCF Growth (1y) %	-11.22	252.76
Gross Profit Growth (1y) %	-15.77	43.92

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.57	0.49
Cash Payout Ratio	0.00	0.09
Cash Ratio	1.05	2.23
Current Ratio	3.89	5.43
Debt to Equity Ratio	0.33	0.34
Interest Cover Ratio	-0.46	8.19
Times Interest Earned	-0.46	8.19

Profitability

Metric	Value	Industry
EBITDA Margin %	6.70	-112.44
EBIT Margin %	-1.56	-92.10
EBT Margin %	-4.95	-132.39
Gross Margin %	44.60	47.63
Net Profit Margin %	-3.60	-133.41

Allegro Microsystems, Inc. (NASDAQ: ALGM)