ALGM

Over the last six months, Allegro MicroSystems’s shares have sunk to $35.80, producing a disappointing 6.1% loss - a stark contrast to the S&P 500’s 10.5% gain. This might have investors contemplating their next move. Is there a buying opportunity in Allegro MicroSystems, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free. Despite the more favorable entry price, we’re cautious about Allegro MicroSystems. Here are three reasons why ALGM doesn’t excite us, plus one stock we’d rather own. Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. Allegro MicroSystems’s recent performance shows its demand has slowed as its revenue was flat over the last two years. Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development. Allegro MicroSystems was profitable over the last two years but held back by its large cost base. Its average operating margin of 2% was weak for a semiconductor business. This result isn’t too surprising given its low gross margin as a starting point. Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king. Allegro MicroSystems has shown poor cash profitability relative to peers over the last two years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 8.1%, below what we’d expect for a semiconductor business. Allegro MicroSystems isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 33× forward P/E (or $35.80 per share). This valuation tells us a lot of optimism is priced in - we think there are better stocks to buy right now. Let us point you toward one of our all-time favorite software stocks. ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Allegro MicroSystems, Inc. ALGM highlighted accelerating demand from AI data centers, electrification and automation during its first-quarter fiscal 2027 earnings call, with management pointing to expanding design wins and backlog growth. Executives emphasized that higher-value content opportunities in data centers, electric vehicles and robotics are becoming key drivers of the company’s long-term growth strategy. President and CEO Michael Doogue said Allegro began fiscal 2027 with strong momentum, reporting its sixth consecutive quarter of sales growth. He highlighted AI infrastructure as a major growth area, with data center revenue reaching a record 17% of total sales in the quarter. The company said data center sales more than doubled from fiscal 2026 levels, supported by demand for current sensors, fan driver ICs and future power solutions. Current sensors represented 22% of first-quarter data center sales and were growing faster than motor driver products. Allegro reported first-quarter sales of $259 million, up 27% year over year, while non-GAAP EPS increased to $0.23 from $0.09 in the prior-year period. Results exceeded the Zacks Consensus Estimate of $0.21 EPS and $253 million revenue. Allegro MicroSystems, Inc. price-consensus-eps-surprise-chart | Allegro MicroSystems, Inc. Quote Doogue said next-generation AI servers create opportunities beyond rack growth because higher power levels require more sensing and control content. He noted that current sensors and fan drivers account for a significant portion of potential AI rack content expansion. During Q&A, a Wells Fargo analyst asked about data center growth assumptions within second-quarter guidance. Doogue said customer signals remain strong and pointed to continued content growth as a driver of the business. Management also highlighted future opportunities from isolated gate drivers and other power technologies. Doogue said isolated gate drivers could become a more meaningful contributor over an 18-to-24-month timeframe. Automotive remained a core growth area, with first-quarter automotive sales increasing 15% year over year to $165 million. Management attributed gains to expanding content in xEV and ADAS applications. Doogue said Allegro is benefiting from rising semiconductor content per vehicle, driven by electrification, advanced safety systems and electromechanical braking technologies. He noted that automotive design wins increased 30% year over year. A Barclays analyst questioned recent automotive trends and competitive dynamics. Doogue responded that Allegro continues to see strong customer activity, supported by design wins, bookings and increased content opportunities across global markets. Allegro also identified robotics and automation as emerging growth opportunities. Doogue said the company expects robotics and automation to contribute 3% to 4% of fiscal 2027 sales. The company secured current sensor wins with Chinese humanoid robot manufacturers and inductive position sensor wins with a North American robotics customer. Management said robotics applications benefit from Allegro’s existing expertise in safety-focused motion control. A Needham analyst asked about the longer-term robotics opportunity. Doogue said growth will depend on adoption rates and the number of joints and motion-control points incorporated into future robotic systems. CFO Derek D’Antilio said first-quarter non-GAAP gross margin reached 51.1%, while operating margin improved to 19.4%. He attributed margin expansion to operating leverage, product mix and early pricing actions. The company is targeting gross margins of 55% and beyond over time. Management cited factory efficiency improvements, product bill-of-material transitions and selective pricing actions as contributors to margin expansion. During Q&A, Wolfe Research asked about pricing actions. D’Antilio said most automotive contracts reset annually, while selective pricing actions in distribution began late in the first quarter and are expected to contribute more meaningfully in the second half of the fiscal year. For the second quarter of fiscal 2027, Allegro expects sales between $265 million and $275 million, representing 26% year-over-year growth at the midpoint. The company forecast non-GAAP EPS of $0.23 to $0.26. Management expects both automotive and industrial markets to deliver mid-single-digit sequential growth. The company also highlighted continued backlog expansion and increasing bookings as indicators of demand strength. The company ended the quarter with $170 million in cash, $285 million in term debt and $115 million in net debt. Free cash flow was $14 million during the quarter. Allegro carries Zacks Rank #3 (Hold), indicating that earnings estimate revisions are currently balanced. The Zacks Rank is designed to help identify stocks with stronger potential over the next one to three months based on changes in earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The stock has a Value Score of F, Growth Score of A, Momentum Score of D and VGM Score of C. Zacks Style Scores range from A to F, with higher grades representing stronger characteristics within each style category. The Zacks Rank may change as analysts revise earnings estimates following new company developments. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegro MicroSystems, Inc. (ALGM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

First Quarter Sales Increased by 27% Year-over-Year to $259 Million MANCHESTER, N.H., July 30, 2026 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. (“Allegro” or the “Company”) (Nasdaq: ALGM), a global leader in power and sensing semiconductor solutions for motion control and energy efficient systems, today announced financial results for its first quarter ended June 26, 2026. “We began fiscal 2027 with strong momentum, delivering our sixth consecutive quarter of sales growth. Fiscal first quarter sales were $259 million, representing a 27% increase year-over-year. GAAP earnings per share improved to $0.08 in fiscal first quarter 2027 from a $0.07 loss per share in fiscal first quarter 2026. Non-GAAP EPS grew for the fifth consecutive quarter to $0.23, increasing more than 2.5x over the first quarter of fiscal 2026. These results were led by data center, which reached a record 17% of total sales, and by continued strength in xEV and ADAS,” said Mike Doogue, President and CEO of Allegro MicroSystems. “Our market leading products and technology sit at the intersection of AI, electrification, and automation — the defining megatrends powering growth across our Auto and Industrial end markets. Increasing bookings and an expanding backlog strengthen our confidence in our strategy and growth potential.” First Quarter Financial Highlights: Business Outlook For the second quarter of fiscal year 2027 ending September 25, 2026, the Company expects total net sales to be in the range of $265 million to $275 million. At the midpoint of this range, it implies growth in net sales of 26% year-over-year. The Company also estimates the following results on a non-GAAP basis: Gross Margin is expected to be between 50.75% and 51.75%, Operating expenses are expected to be $84.5 million, plus or minus $1 million, and Diluted Earnings per Share is expected to be between $0.23 and $0.26, with the mid-point of this range implying an 88% year-over-year increase. Allegro has not provided a reconciliation of its second fiscal quarter outlook for non-GAAP Gross Margin, non-GAAP Operating Expenses, and non-GAAP Diluted Earnings per Share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate between such forward-looking non-GAAP measures and the comparable forward-looking U.S. generally accepted accounting principles (“GAAP”) measures. Certain factors that are materially significant to Allegro’s ability to estimate these items are out of its control and/or cannot be reasonably predicted. Earnings Webcast A webcast will be held on Thursday, July 30, 2026 at 8:30 a.m., Eastern Time. Michael C. Doogue, President and Chief Executive Officer, and Derek P. D’Antilio, Executive Vice President and Chief Financial Officer, will discuss Allegro’s business and financial results. The webcast will be available on the Investor Relations section of the Company’s website at investors.allegromicro.com. A recording of the webcast will be posted in the same location shortly after the call concludes and will be available for at least 90 days. About Allegro MicroSystems Allegro MicroSystems, Inc. is leveraging more than three decades of expertise in magnetic sensing and power ICs to propel electrification, automation, AI data center, and robotics forward with solutions that enhance efficiency, performance and sustainability. Allegro’s commitment to quality drives transformation across industries, reinforcing our status as a pioneer in “automotive-grade” technology and a partner in our customers’ success. For additional information, please visit https://www.allegromicro.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release including statements regarding our future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors and trends affecting our business, including the projected size and growth of markets in which we operate or may operate, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “would,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seek,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance or achievements, and one should avoid placing undue reliance on such statements. Forward-looking statements are based on our management’s current expectations, beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended March 27, 2026, as any such factors may be updated from time to time in our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission (the “SEC”). These risks and uncertainties include, but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions or customer demand; the cyclical nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business; our ability to maintain or improve our gross margins may be adversely affected by decreases in average selling prices of our products, increases in input costs or shifts in product, customer or channel mix; our ability to manage any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products; our ability to accurately predict our quarterly net sales and operating results and meet the expectations of investors; our dependence on manufacturing operations in the Philippines; our reliance on distributors to generate sales; events beyond our control, including conflicts in the Middle East, impacting us, our key suppliers or our manufacturing partners or other third-party suppliers of components, materials or subassemblies; our ability to develop new product features or new products in a timely and cost-effective manner; our dependence on growth in the end markets that use our products, and the impact that slowdowns in such growth, including as a result of volatility in demand for emerging technologies or changes in government incentives, could have on our financial results; the loss of one or more significant customers; our ability to identify, enter and expand in new markets, and to generate returns on such investments; uncertainties related to the design win process and our ability to recover design and development expenses and to generate timely or sufficient net sales or margins; changes in government trade policies, including the imposition of export restrictions and tariffs; our exposures to warranty claims, product liability claims and product recalls; our dependence on international customers and operations; risks, liabilities, costs and obligations related to governmental regulations and other legal obligations, including export/trade control, privacy, data protection, information security, cybersecurity, consumer protection, environmental and occupational health and safety, antitrust, anti-corruption and anti-bribery, product safety, environmental protection, employment matters and tax; the volatility of currency exchange rates; our ability to raise capital to support our growth strategy; our indebtedness may limit our flexibility to operate our business; our ability to retain key and highly skilled personnel; the impact on the market price of our common stock from future sales of our common stock by large stockholders, or the perception that such sales could occur; the impact of restructuring activities on our business and operating results; our ability to protect our proprietary technology and inventions through patents or trade secrets; our ability to commercialize our products without infringing third-party intellectual property rights; disruptions or breaches of our information technology systems or confidential information or those of our third-party service providers; the risks presented by the use of artificial intelligence, machine learning and automated decision-making technologies by us and others; any failure to maintain effective internal control over financial reporting; changes in tax rates or the adoption of new tax legislation; the negative impacts of sustained inflation on our business; and other events beyond our control. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. You should read this press release and the documents that we reference completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. All forward-looking statements speak only as of the date of this press release, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise. This press release includes certain non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to measures of, financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their most directly comparable GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the presented non-GAAP financial measures as tools for comparison. This press release may not be reproduced, forwarded to any person or published, in whole or in part. Supplemental Schedule of Total Net Sales The following table summarizes total net sales by market within the Company’s unaudited condensed consolidated statements of operations: Non-GAAP Financial Measures In addition to the measures presented in our condensed consolidated financial statements, we regularly review other measures, defined as non-GAAP financial measures by the SEC, to evaluate our business, measure our performance, identify trends, prepare financial forecasts and make strategic decisions. The key measures we consider are non-GAAP Gross Profit, non-GAAP Gross Margin, non-GAAP Operating Expenses, non-GAAP Operating Income, non-GAAP Operating Margin, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP Profit before Tax, non-GAAP Income Tax Provision, non-GAAP Effective Tax Rate, non-GAAP Net Income Attributable to Allegro MicroSystems, Inc, non-GAAP Basic and Diluted Earnings per Share, non-GAAP Free Cash Flow, and non-GAAP Free Cash Flow as a percentage of net sales (collectively, the “Non-GAAP Financial Measures”). These Non-GAAP Financial Measures provide supplemental information regarding our operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be unrelated to our core operations, and in the case of non-GAAP Income Tax Provision (Benefit), management believes that this non-GAAP measure of income taxes provides it with the ability to evaluate the non-GAAP Income Tax Provision (Benefit) across different reporting periods on a consistent basis, independent of special items and discrete items, which may vary in size and frequency. These Non-GAAP Financial Measures are used by both management and our board of directors, together with the comparable GAAP information, in evaluating our current performance and planning our future business activities. The Non-GAAP Financial Measures are supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. These Non-GAAP Financial Measures should not be considered as substitutes for GAAP financial measures, such as gross profit, gross margin, net income or any other performance measures derived in accordance with GAAP. Also, in the future we may incur expenses or charges, such as those being adjusted in the calculation of these Non-GAAP Financial Measures. Our presentation of these Non-GAAP Financial Measures should not be construed as an inference that future results will be unaffected by unusual or nonrecurring items. These Non-GAAP Financial Measures exclude costs related to acquisition and related integration expenses, amortization of acquired intangible assets, stock-based compensation, restructuring actions, related-party activities and other non-operational costs. Non-GAAP Income Tax Provision In calculating the non-GAAP Income Tax Provision, we adjust for the tax effect of adjustments to GAAP results which represents the estimated income tax effect of the adjustments to non-GAAP Profit before Tax described below. We also adjust for any discrete tax items and the impact of non-recurring tax law changes to ensure the non-GAAP Income Tax Rate (“NG ETR”) reflects future operations. Our fiscal year 2026 and 2027 NG ETR excludes the impact of the 2025 One Big Beautiful Bill Act’s one-time research and development amortization election which accelerates the amortization of previously capitalized domestic research and development over a two-year period. The NG ETR is applied to non-GAAP Profit before Tax to arrive at the tax effect of adjustments to GAAP results. Reconciliation of Non-GAAP Gross Profit and Non-GAAP Gross Margin Reconciliation of Non-GAAP Operating Expenses Reconciliation of Non-GAAP Operating Income and Non-GAAP Operating Margin Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation of Non-GAAP Profit before Tax Reconciliation of Non-GAAP Income Tax Provision and Non-GAAP Effective Tax Rate Reconciliation of Non-GAAP Net Income Attributable to Allegro MicroSystems, Inc. and Non-GAAP Earnings per Share Reconciliation of Non-GAAP Free Cash Flow and Non-GAAP Free Cash Flow as Percentage of Net Sales Investor Contact:Jalene HooverVP of Investor Relations & Corporate Communications+1 (512) [email protected]

This article first appeared on GuruFocus. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Allegro Microsystems Inc (NASDAQ:ALGM) delivered its sixth consecutive quarter of sequential sales growth, with Q1 FY2027 sales of $259 million, exceeding the high end of guidance and representing a 27% year-over-year increase. Data center sales surged to a record 17% of total revenue, driven by a 66% sequential increase in current sensor sales, which now account for 22% of data center revenue. The company secured significant design wins in robotics, including current sensor wins with large Chinese humanoid robot OEMs and an inductive position sensor win with a prominent North American humanoid robotics OEM, contributing 3-4% of FY2027 sales. Automotive sales grew 15% year-over-year, outpacing the long-term target, with design wins up 30% year-over-year, particularly in electronic power steering and electromechanical braking systems. Gross margin improved to 51.1%, up 290 basis points year-over-year, driven by operating leverage, product mix, and selective pricing actions, with a clear path to the 55% target. Bookings increased for the seventh consecutive quarter, and backlog continued to expand, indicating strong forward demand signals. The company experienced within-lead-time orders that could not be shipped in Q1, leading to a slight delinquency that will be shipped over the next couple of quarters, indicating potential capacity constraints. Gross margin guidance for Q2 is only 50.75%-51.75%, with a lower drop-through rate of 57% due to a higher mix of automotive sales, which have lower margins than industrial. Operating expenses are expected to increase to $84.5 million in Q2 due to targeted R&D investments and higher variable compensation, potentially pressuring near-term profitability. The automotive business saw only 1% sequential growth in Q1, with some deceleration in Focus Auto, reflecting a flattening trend compared to peers who are reaccelerating. Pricing actions are expected to have a more significant impact only in the back half of the fiscal year, limiting near-term gross margin improvement from this lever. The company noted that the general industrial business, which contributed to the Q1 beat, can be lumpy from quarter to quarter, introducing uncertainty in future industrial revenue. Here are the key highlights from the Allegro Microsystems Inc (NASDAQ:ALGM) Q1 2027 earnings call, presented as Q&A summaries. Warning! GuruFocus has detected 5 Warning Signs with ALGM. Is ALGM fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on the pricing actions you are taking and how they will affect gross margins, especially given the annual negotiations with auto customers? A: (Derek Dentilio, CFO) The majority of our auto customer contracts begin at the start of the calendar year, and as normal, we saw low single-digit declines in those contracts. However, due to inflationary headwinds, we are taking selective price actions, largely in the distribution channel, which began at the tail end of Q1. While the slight beat in Q1 gross margin was due to positive mix, we expect these pricing actions to become more impactful and beneficial to gross margins in the back half of the fiscal year (Q3 and Q4). Q: As the data center business grows, what is the expected mix between current sensors and fan drivers, and how does that affect the margin profile? A: (Derek Dentilio, CFO) Current sensors have a higher gross margin profile than fan drivers. We are seeing multiple positive dynamics, including increasing power levels in data centers and share gains due to our innovative TMR technology. As a result of current sensors now being 22% of our data center business, the overall gross margins for that segment are now in the mid-50s. Q: You mentioned data center sales will more than double in fiscal 2027. Is that a starting point, and what is your visibility on potentially revising that number upward? A: (Mike Doogue, CEO) Our confidence is based on strong design win momentum and a short time-to-market. The primary driver for potential upside would be if the year-over-year growth in data center CapEx spend, which is currently estimated at around 80% for calendar 2026, were to flex up. We will provide more color as the year progresses. Q: Can you discuss the traction you are seeing with TMR technology versus Hall effect, both in automotive and data center applications? A: (Mike Doogue, CEO) We are seeing TMR technology extend into growth applications. In auto, we secured our first major TMR angle sensor win for ADAS steering motors in China, taking share from established players. In data center, as customers adopt SiC and GaN, the need for faster switching speeds requires very fast current sensors. Our TMR current sensors are much faster than Hall effect, which is why we are winning in data center power supplies. Q: When should we expect the isolated gate driver and PMIC businesses to become a more meaningful part of the data center revenue stream? A: (Mike Doogue, CEO) For isolated gate drivers, we expect a material impact in 18 to 24 months. We will begin sampling a generation 2 product ideal for data centers this fall, which should accelerate momentum. Regarding PMICs, they are more automotive-focused and are not a major growth vector for us in the data center. Even without PMICs, we have a robust dollar content growth story. Q: Your auto growth has flattened sequentially while some peers are reaccelerating. Is there something different about your customer mix or how you handled inventory? A: (Derek Dentilio, CFO) It relates to how we handled the inventory cycle. We had a very painful quarter two years ago with significant inventory digestion, but we came back much earlier in the cycle. Despite the sequential flattening, we continue to see strong underlying demand, with design wins up 30% year-over-year and bookings up 30% year-over-year, including a growing proportion of port orders that couldn't be shipped within the quarter. Q: Can you distinguish between the content opportunity in humanoid robotics versus other forms of industrial automation? A: (Mike Doogue, CEO) The dollar content opportunity is largely based on the number of joints or degrees of freedom in a moving system. Whether it's a singular robotic arm on a conveyor belt or a humanoid, more joints mean more content for Allegro. We are seeing wins and revenue ramps across the full spectrum, from factory automation arms to autonomous mobile robots, not just humanoids. Q: You mentioned robotics would be 3-4% of fiscal 2027 sales. Can you provide a baseline for where it was in fiscal 2026 and how you see that trajectory? A: (Mike Doogue, CEO) We provided the 3-4% number to establish a baseline, showing we are already winning in this space. We are starting from a relatively small base, and the growth rate will ultimately depend on the pace of adoption of robots with more joints. While we won't forward guide, multiplying a meaningful number like 3-4% by a high long-term growth opportunity can have a significant impact on the company's overall growth rate over time. Q: What is the demand environment like in China, and how is it contributing to your growth? A: (Mike Doogue, CEO) We see relative strength in China, which matches our internal data. A significant number of high-dollar-content design wins are happening there, such as for electromechanical braking (EMB) systems. The EV market in China is strong, and during a recent visit, we found our market share with a top customer has increased significantly over the past year. Our China business grew 6% sequentially in Q1. Q: Can you comment on the demand environment for electromechanical braking (EMB) and steer-by-wire, and how much growth that could drive in fiscal 2027? A: (Mike Doogue, CEO) We see broad global trends towards EMB and steer-by-wire. These systems represent a meaningful amount of additional content per vehicle. They are a key factor giving us confidence in our ability to grow double-digits in automotive, even in a flat or negative SAR environment, both in FY27 and beyond. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Allegro MicroSystems, Inc. (ALGM) came out with quarterly earnings of $0.23 per share, beating the Zacks Consensus Estimate of $0.21 per share. This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +9.52%. A quarter ago, it was expected that this company would post earnings of $0.16 per share when it actually produced earnings of $0.17, delivering a surprise of +6.25%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Allegro MicroSystems, which belongs to the Zacks Electronics - Semiconductors industry, posted revenues of $259.24 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.47%. This compares to year-ago revenues of $203.4 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Allegro MicroSystems shares have added about 60% since the beginning of the year versus the S&P 500's gain of 6.9%. While Allegro MicroSystems has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Allegro MicroSystems was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.25 on $269.91 million in revenues for the coming quarter and $0.98 on $1.09 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Semiconductors is currently in the top 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Cirrus Logic (CRUS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This chipmaker is expected to post quarterly earnings of $1.80 per share in its upcoming report, which represents a year-over-year change of +19.2%. The consensus EPS estimate for the quarter has been revised 0.2% lower over the last 30 days to the current level. Cirrus Logic's revenues are expected to be $459.88 million, up 12.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegro MicroSystems, Inc. (ALGM) : Free Stock Analysis Report Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Allegro MicroSystems, Inc.? Here are five stocks we like better. Allegro reported strong fiscal Q1 results: Sales rose 27% year over year to $259 million, while non-GAAP EPS surged 156% to $0.23. Improved product mix, operating leverage and pricing actions helped lift gross margin to 51.1%. Data centers emerged as a major growth driver. Data center revenue reached a quarterly record, accounting for 17% of total sales, and Allegro expects fiscal 2027 data center sales to more than double from the prior year, supported by current sensors, fan drivers and future isolated gate-driver products. Management expects continued momentum across automotive, robotics and industrial markets. Automotive bookings and design wins strengthened, robotics is projected to contribute 3%–4% of fiscal 2027 sales, and second-quarter revenue is forecast at $265 million–$275 million with EPS of $0.23–$0.26. Why These 3 Automotive & Industrial Chip Stocks Just Soared Allegro MicroSystems (NASDAQ:ALGM) reported first-quarter fiscal 2027 sales of $259 million, exceeding the high end of its guidance range and rising 7% sequentially and 27% from a year earlier. Non-GAAP earnings per share reached $0.23, up 35% sequentially and 156% year over year, as the company cited operating leverage, product mix and early contributions from pricing actions. President and Chief Executive Officer Mike Doogue said the quarter marked Allegro’s sixth consecutive period of sequential sales growth. Bookings increased for a seventh consecutive quarter, while backlog also expanded, according to management. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Shares Down, Price Targets Up: 3 Stocks Upgraded After +10% Drops “Our forward demand signals strengthened again this quarter,” Doogue said, pointing to growth opportunities tied to artificial intelligence, electrification and automation. Industrial and other sales increased 18% sequentially to $94 million and rose 59% from the prior-year quarter, led by data center demand. Data center sales accounted for 17% of total first-quarter revenue, compared with 14% in the prior quarter and 10% in the third quarter of fiscal 2026. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Better Than NVIDIA: Top 2 Semiconductor Stocks to Watch Today Doogue said data center revenue rose 32% sequentially to a quarterly record. Current sensors represented 22% of data center sales in the quarter, growing 66% sequentially, as customers adopted the products to improve power efficiency and system power density. Allegro expects fiscal 2027 data center sales to more than double from fiscal 2026. The company said its current sensors and fan driver integrated circuits are supporting near-term demand, while isolated gate drivers could add further content opportunities in future AI-focused server architectures. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? Chief Financial Officer Derek D’Antilio said data center product gross margins have reached the mid-50% range, supported by the growing contribution from current sensors. He said current sensors carry gross margins above the company average, while motor drivers are slightly below that level. The company also expects isolated gate drivers to generate above-average margins as they enter the market. D’Antilio said Allegro expects a material contribution from its isolated gate-driver products in data centers in roughly 18 to 24 months. The company plans to begin sampling a second-generation product designed for data center applications in the fall. Automotive sales totaled $165 million, increasing 1% sequentially and 15% year over year. Focus Auto sales, which include electric vehicle and advanced driver-assistance system applications, increased 3% from the prior quarter and 11% from a year earlier. Management said automotive customer demand remains strong, although some within-lead-time orders could not be shipped during the first quarter. Automotive bookings rose 30% year over year and increased by high single digits sequentially, while automotive design wins also increased 30% from the prior-year period. Doogue said the company sees a path for Allegro content to rise from about $40 in legacy internal-combustion-engine vehicles to more than $100 in next-generation battery-electric vehicles. The company highlighted first-quarter design wins across Korea, Japan and China, including electronic power steering, hybrid traction inverters, onboard chargers and 12-volt and 48-volt electromechanical braking systems. Allegro also secured its first major tunneling magnetoresistance, or TMR, angle-sensor programs for ADAS steering motors with Chinese automakers. Doogue said the company is using TMR technology to pursue share gains in automotive and data center applications, where higher switching speeds in silicon carbide and gallium nitride power systems require faster current sensing. Management expects both automotive and industrial end markets to deliver mid-single-digit sequential sales growth in the fiscal second quarter. Allegro said robotics and automation are becoming an additional source of demand for its sensor and power products. During the quarter, the company secured current-sensor wins with large Chinese humanoid robot original equipment manufacturers and a design win with a North American humanoid robotics company using Allegro inductive position sensors in robotic joints. The company expects robotics and automation to account for 3% to 4% of fiscal 2027 sales. Doogue said Allegro estimates its addressable content could exceed $150 per humanoid robot by 2030, based on the number of joints, actuators and safety-relevant motor-control systems in those devices. Management said the opportunity also extends beyond humanoid robots to industrial robotic arms, autonomous mobile robots and other factory automation systems. First-quarter non-GAAP gross margin was 51.1%, up from 50% in the prior quarter and 48.2% a year earlier. Non-GAAP operating margin was 19.4%, compared with 15.6% in the fourth quarter and 11.1% in the prior-year period. Adjusted EBITDA margin was 23.9%. D’Antilio attributed gross-margin improvement to operating leverage, product mix, factory efficiencies, bill-of-material transitions and selective pricing actions. The company is working on transitions including gold-to-copper wire bonding and continues to target gross margin of 55% and higher over the next several years. While pricing actions began late in the first quarter, D’Antilio said their impact should become more meaningful in the second half of fiscal 2027. He noted that auto pricing was down low single digits under annual customer contracts that began at the start of the calendar year, while selective actions have focused largely on distribution channels. Cash at quarter-end: $170 million Cash flow from operations: $22 million Capital expenditures: $8 million Free cash flow: $14 million Term debt: $285 million Net debt: $115 million For the fiscal second quarter, Allegro forecast sales of $265 million to $275 million. At the midpoint, the outlook represents 26% year-over-year growth. The company projected non-GAAP gross margin of 50.75% to 51.75%, operating expenses of approximately $84.5 million, and non-GAAP earnings per share of $0.23 to $0.26. The midpoint of the EPS outlook would represent an 88% increase from the year-earlier period. Allegro MicroSystems, Inc (NASDAQ: ALGM) is a leading designer and manufacturer of high-performance power and sensing integrated circuits. The company focuses on semiconductor solutions that enable precise motion control, energy-efficient power management and robust sensing in a wide range of applications. Allegro's product portfolio includes Hall-effect magnetic sensors, current and position sensing ICs, motor driver and controller devices, and power management components. Allegro MicroSystems serves major automotive, industrial and consumer markets worldwide. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Allegro MicroSystems Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Chip designer Allegro MicroSystems (NASDAQ:ALGM) will be reporting results this Thursday before market hours. Here’s what you need to know. Allegro MicroSystems beat analysts’ revenue expectations last quarter, reporting revenues of $243.2 million, up 26.1% year on year. It was a mixed quarter for the company, with a decent beat of analysts’ operating income estimates but a significant miss of analysts’ EPS estimates. Is Allegro MicroSystems a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Allegro MicroSystems’s revenue to grow 23.6% year on year, improving from the 21.9% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Allegro MicroSystems rarely misses Wall Street’s revenue estimates. Looking at Allegro MicroSystems’s peers in the processors and graphics chips segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Intel delivered year-on-year revenue growth of 25.4%, beating analysts’ expectations by 11.7%, and Penguin Solutions reported revenues up 47.6%, topping estimates by 17.5%. Intel traded down 8% following the results while Penguin Solutions was up 25.1%. Read our full analysis of Intel’s results here and Penguin Solutions’s results here. Over the last year or so, investors' attention has moved from one major market theme to the next, spanning AI disruption and surging infrastructure investment to geopolitical tensions, interest rates, and the health of the broader economy. Investors in processors and graphics chips stocks haven’t been spared in this environment as share prices are down 20.1% on average over the last month. Allegro MicroSystems is down 33% during the same time and is heading into earnings with an average analyst price target of $56.55 (compared to the current share price of $44.46). ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all. Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.

FormFactor (FORM) came out with quarterly earnings of $0.82 per share, beating the Zacks Consensus Estimate of $0.61 per share. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +34.43%. A quarter ago, it was expected that this integrated circuits diagnostic company would post earnings of $0.45 per share when it actually produced earnings of $0.56, delivering a surprise of +24.44%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. FormFactor, which belongs to the Zacks Electronics - Semiconductors industry, posted revenues of $258.24 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.55%. This compares to year-ago revenues of $195.8 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. FormFactor shares have added about 58.2% since the beginning of the year versus the S&P 500's gain of 8.5%. While FormFactor has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for FormFactor was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.60 on $244.13 million in revenues for the coming quarter and $2.40 on $958.05 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Semiconductors is currently in the top 21% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Allegro MicroSystems, Inc. (ALGM), is yet to report results for the quarter ended June 2026. The results are expected to be released on July 30. This company is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of +133.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Allegro MicroSystems, Inc.'s revenues are expected to be $252.99 million, up 24.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report FormFactor, Inc. (FORM) : Free Stock Analysis Report Allegro MicroSystems, Inc. (ALGM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Allegro MicroSystems ALGM is scheduled to report first-quarter fiscal 2027 results on July 30, 2026, after market close. The Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $253 million, implying a 24.4% increase from the year-ago quarter. The consensus mark for earnings is pegged at 21 cents per share, indicating an increase of 133% from the year-ago quarter. The bottom-line estimate has remained unchanged over the past 30 days. ALGM’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 5.43%. Allegro MicroSystems, Inc. price-eps-surprise | Allegro MicroSystems, Inc. Quote Allegro MicroSystems’ first-quarter fiscal 2027 results are likely to reflect sustained momentum across its automotive and industrial businesses, supported by rising demand for intelligent power and sensing solutions. The company is benefiting from secular trends, including vehicle electrification, advanced driver assistance systems (ADAS), AI infrastructure and industrial automation, which are expected to continue driving higher semiconductor content per system. These factors are likely to have reflected positively in the to-be-reported quarter. ALGM’s automotive revenues are likely to have been supported by increasing semiconductor content in electric vehicles and advanced safety platforms. Strong design-win activity and growing adoption of next-generation sensing and power management products are expected to have remained key growth drivers in the to-be-reported quarter. Continued penetration of xEV platforms and advanced safety applications is likely to have supported demand. Industrial revenues are expected to have benefited from improving investments in AI data centers, robotics and energy infrastructure. Allegro’s solutions that improve power efficiency and precision are likely to have witnessed healthy traction as enterprises continue investing in AI computing infrastructure and factory automation. Management’s strategic focus on these higher-growth industrial markets is expected to have supported a more diversified revenue mix in the first quarter of fiscal 2027. The company’s continued emphasis on product innovation, operational discipline and manufacturing efficiency is likely to have aided profitability in the quarter. Allegro’s expanding portfolio of differentiated analog and mixed-signal solutions, coupled with a healthy pipeline of new products, is expected to have supported margin expansion. However, near-term results are likely to remain influenced by macroeconomic uncertainty, automotive production trends and pricing pressure across the semiconductor industry. Supply-chain dynamics and customer inventory adjustments might have also continued to create periodic headwinds despite improving end-market demand. Our proven model does not conclusively predict an earnings beat for Allegro MicroSystems this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. Though ALGM carries a Zacks Rank #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here. Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle. Amphenol APH has an Earnings ESP of +1.12% and sports a Zacks Rank #1 at present. Amphenol shares have gained 13% year to date. Amphenol is scheduled to report its second-quarter 2026 results on July 29. ASE Technology ASX has an Earnings ESP of +21.21% and a Zacks Rank #2 at present. ASE Technology shares have surged 128.9% year to date. ASE Technology is set to report its second-quarter 2026 results on July 30. Fortive FTV has an Earnings ESP of +2.82% and a Zacks Rank #2 at present. Fortive shares have gained 13% in the year-to-date period. Fortive is set to report second-quarter 2026 results on July 29. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegro MicroSystems, Inc. (ALGM) : Free Stock Analysis Report Amphenol Corporation (APH) : Free Stock Analysis Report ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report Fortive Corporation (FTV) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Investing.com -- Barclays turned more selective on U.S. semiconductor stocks ahead of the second-quarter earnings season, upgrading Lumentum Holdings while downgrading Allegro MicroSystems and Penguin Solutions, saying strong artificial intelligence-related gains have left limited room for further upside across much of the sector. The brokerage upgraded Lumentum to Overweight from Equal Weight, citing improving confidence in demand for AI networking components and stronger earnings potential. It also reiterated Overweight on Credo Technology and maintained Equal Weight on Astera Labs despite raising its price target, reflecting expectations that AI spending will remain a key growth driver. The rating changes underscore Barclays' view that while AI infrastructure spending continues to support the semiconductor sector, rich valuations have raised the bar for earnings-driven upside. The brokerage favors companies with clearer exposure to AI networking demand, while cautioning that stocks trading on longer-term themes such as robotics and enterprise AI may have moved ahead of their near-term fundamentals. Barclays downgraded Allegro MicroSystems to Equal Weight from Overweight, arguing that the stock's valuation already reflects optimism around its data center opportunity while its core automotive business remains weak. The bank said data center revenue is growing rapidly but is unlikely to fully offset sluggish auto demand in the near term, while meaningful robotics revenue is not expected until around 2030. The brokerage also cut Penguin Solutions to Underweight from Equal Weight, saying the stock's sharp rally has outpaced fundamentals. Barclays said the company's recent earnings strength has been driven primarily by higher memory prices rather than sustainable growth in advanced computing, while emerging opportunities such as Compute Express Link (CXL) and enterprise AI are still too early to justify its premium valuation. Looking across the sector, Barclays said investor expectations heading into earnings remain elevated after a strong first half driven by AI infrastructure spending. While demand for memory, optics and AI networking continues to improve, the firm warned that many semiconductor stocks already price in optimistic growth assumptions, making it harder for earnings results alone to drive another leg higher. Related articles Barclays upgrades Lumentum, cuts Allegro, Penguin before chip earnings Nvidia's new Alpamayo project: What it means for Tesla? 5 reasons why Jefferies thinks Meta’s pullback is a buying opportunity