Overview - Allegro has experienced a significant operational shift following a CEO change and has reported a strong performance in 2025, marking five years since going public [1] Automotive Industry - The automotive sector has shown robust growth over the past several years, continuing to recover from the impacts of COVID-19 [2] - An unusual inventory correction occurred in the automotive industry, where automakers and Tier 1 suppliers typically maintain low inventory levels, but increased inventory was observed starting in 2022 due to incentives from OEMs and historically low interest rates [2]

Allegro MicroSystems FY Conference Summary Company Overview - **Company**: Allegro MicroSystems (NasdaqGS:ALGM) - **Date**: December 10, 2025 - **Key Speakers**: Derek D'Antilio (CFO), Mark Gill (VP of Corporate Strategy) Industry Context - **Industry**: Automotive and Industrial Semiconductor Market - **Recent Changes**: CEO change in February 2025, with a focus on innovation and leadership restructuring Key Points Performance and Market Dynamics - Allegro celebrated its fifth anniversary as a public company, having experienced strong growth during the automotive upcycle post-COVID [3][4] - A significant inventory correction occurred in the automotive sector starting in December 2023, leading to a 30% sequential revenue decline in June 2024, particularly in China [4][5] - The company is optimistic about the end of the inventory correction, with improved internal models for inventory management and customer behavior [5][6] Revenue Guidance and Market Drivers - For the December quarter, Allegro guided a 5% sequential revenue increase, which is better than the typical seasonal decline of 5% [7][8] - Key drivers for this growth include: - Strength in the automotive sector, with an expected increase in auto production by 3 million units in 2025 [9] - A resurgence in the data center business, which accounted for 8% of revenue last quarter [9] Inventory and Consumption Insights - Allegro has observed lean inventories in the U.S., China, and Korea, while European inventories remain higher [13][14] - Distributors are back to a target inventory model of 10-12 weeks, indicating a more stable supply chain [13] Automotive Market Trends - The content opportunity per vehicle is approximately $9, with potential increases to $40 for internal combustion engine (ICE) vehicles and up to $100 for electric vehicles (EVs) [18][19] - Allegro is well-positioned to benefit from the shift towards electrification and advanced driver assistance systems (ADAS), which significantly increase content per vehicle [20][21] Regional Performance - In the September quarter, all regions grew except Europe, which faced challenges [24] - China represents about 27% of Allegro's business, primarily in automotive, with strong growth expected in exports [25] Industrial Market Insights - The industrial market is seeing growth in medical applications and electrification of the grid, with a focus on robotics as a significant future opportunity [26][28] - Allegro is actively engaging with various robotics companies globally, indicating a robust pipeline for future growth [31] Data Center and Power Management - Allegro's data center business has rebounded, now accounting for 8% of revenue, with a broader portfolio including power management solutions [33][35] - The company is well-positioned for the transition to higher voltage systems (48V to 800V), leveraging technology developed for the automotive sector [35][36] Sensor Technology and Competitive Position - Allegro claims a 23% market share in the magnetic sensing market, positioning itself as a leader over competitors like Infineon and Melexis [55] - The acquisition of TMR technology enhances Allegro's sensor portfolio, offering better precision and lower power consumption compared to traditional Hall Effect sensors [56][57] Future Outlook - The company anticipates significant growth in humanoid robotics, with content opportunities estimated at $100-$110 per robot [52] - Allegro is focused on design wins today to ensure meaningful revenue contributions from robotics and automation in the coming years [52] Conclusion Allegro MicroSystems is navigating a complex market landscape with a focus on innovation, inventory management, and strategic growth in both automotive and industrial sectors. The company is well-positioned to capitalize on emerging trends in electrification, robotics, and data center technologies, with a strong emphasis on enhancing its sensor capabilities.

Core Insights - The Macquarie Small Cap Value Fund Institutional class shares underperformed compared to its benchmark, the Russell 2000 Value, in Q3 2025 [3] Group 1 - The fund's performance lagged behind the benchmark, indicating potential challenges in the small-cap value sector [3]

Core Insights - Allegro MicroSystems, Inc. will present at the 53rd Annual Nasdaq Investor Conference on December 10, 2025, in London, UK [1] - The company's EVP and CFO, Derek D'Antilio, and VP of Corporate Strategy, Mark Gill, will participate in a fireside chat at 3:00 PM GMT [1] Company Overview - Allegro MicroSystems is a leader in power and sensing semiconductor solutions, focusing on motion control and energy-efficient systems [1] - The company has over three decades of expertise in magnetic sensing and power integrated circuits (ICs), driving advancements in automotive, clean energy, and industrial automation [3] - Allegro is recognized for its commitment to quality and innovation, particularly in "automotive grade" technology, enhancing efficiency, performance, and sustainability across various industries [3]

Core Insights - Allegro MicroSystems, Inc. (NASDAQ:ALGM) is identified as an overlooked tech stock with strong growth potential [1] - Evercore ISI raised its price target for Allegro from $37 to $49, maintaining an "Outperform" rating, driven by robust automotive and data center cycles [2] - The company reported a 14% year-over-year sales growth in Q2, reaching $214 million, with significant contributions from e-Mobility and Industrial segments [3] Financial Performance - Q2 sales reached $214 million, reflecting a 14% YoY growth, with e-Mobility and Industrial segments growing by 21% and 23% respectively [3] - Non-GAAP EPS for the quarter was $0.13, exceeding expectations [3] - Q3 sales are projected to be between $215 million and $225 million, with gross margins expected in the 49%-51% range and non-GAAP EPS between $0.12 and $0.16 [4] Growth Drivers - Short-term growth is supported by design wins in Advanced Driver-Assistance Systems (ADAS), electric vehicle (xEV) powertrains, and data center power supplies [4] - Long-term growth is bolstered by new high-voltage gate drivers for silicon carbide technology [4] - The company is advancing in automotive, clean energy, and industrial automation sectors by providing efficient and sustainable technology solutions [5]

Core Insights - The article highlights the significant gains of major chip companies, specifically Nvidia and Broadcom, which have seen stock price increases of 278% and 224% respectively since early 2024 [1]. Group 1: Company Performance - Nvidia has experienced a stock price increase of 278% since early 2024, indicating strong investor interest and confidence in its performance in the AI sector [1]. - Broadcom's stock has risen by 224% in the same period, reflecting its robust position in the semiconductor market [1]. Group 2: Market Trends - The focus on prominent chip manufacturers is driven by the growing demand for AI technologies, which has led to increased investment in these companies [1].

Core Insights - The article discusses the current state of the tech market, particularly focusing on AI-related stocks and the emergence of overlooked tech stocks that may present investment opportunities amidst market volatility and valuation concerns [2][5]. Market Overview - U.S. AI-related stocks experienced a decline, with SoftBank Group losing nearly $50 billion in market capitalization [2]. - Goldman Sachs CEO anticipates a 10-20% market drawdown within the next two years, while the IMF and Bank of England foresee an AI bubble emerging soon [2]. - AI-linked ETFs have shown significant volatility, with performance spreads of 60% among nearly 400 thematic ETFs in 2025 [3]. Company Performance - Bitdeer Technologies Group (NASDAQ:BTDR) reported a 173.6% year-over-year revenue increase to $169.7 million in Q3 2025, driven by self-mining operations [12]. - Alkami Technology, Inc. (NASDAQ:ALKT) achieved a 31.5% year-over-year revenue growth to $113 million in Q3 2025, with annual recurring revenue surging 31% to $449 million [16][17]. - Allegro MicroSystems, Inc. (NASDAQ:ALGM) reported a 14% year-over-year sales growth to $214 million, driven by demand in automotive and data center sectors [22]. Investment Opportunities - The article emphasizes the potential of overlooked tech stocks that combine innovation with operational prudence, suggesting they may offer sustainable growth avenues [5]. - Bitdeer Technologies Group has a projected upside potential of 127.16% and is focusing on AI cloud infrastructure and Bitcoin mining solutions [10][14]. - Alkami Technology has an upside potential of 60.32% and is expanding its client base significantly [15][19]. - Allegro MicroSystems has an upside potential of 44.98% and is benefiting from robust automotive and data center cycles [20][21]. Methodology for Stock Selection - The selection of overlooked tech stocks involved scanning financial media and online screeners for companies with a market capitalization over $2 billion and an upside potential of at least 10% as of November 12, 2025 [7]. - The analysis also considered hedge fund ownership, focusing on stocks with relatively lower hedge fund holdings compared to industry peers [7][8].

Group 1 - eBay Inc reported a significant increase in revenue, driven by strong demand in the e-commerce sector, with a year-over-year growth of 12% [1] - Impinj Inc has shown promising growth in its RFID technology segment, with a 15% increase in sales compared to the previous quarter, indicating a robust market demand [1] - Allegro Microsystems Inc has expanded its market share in the semiconductor industry, achieving a 10% rise in revenue, attributed to increased adoption of electric vehicles [1] Group 2 - The overall market analysis indicates a positive trend in the technology and e-commerce sectors, with companies leveraging innovative solutions to capture consumer interest [1] - The semiconductor industry is experiencing a surge in demand, particularly from the automotive sector, which is driving growth for companies like Allegro Microsystems [1] - The report highlights the importance of adapting to market changes and consumer preferences, as companies that innovate are likely to outperform their competitors [1]

Core Viewpoint - Allegro MicroSystems has experienced a significant share price increase of 44.5%, reaching $27, prompting investors to consider their next steps regarding potential buying opportunities or risks [1]. Group 1: Revenue Performance - Allegro MicroSystems has seen a decline in revenue, with a 14.2% annual decrease over the last two years, indicating a loss of previous growth [3]. - Despite a revenue growth of 6.1% over the past five years, the company's earnings per share (EPS) have declined by 15.6% annually, suggesting reduced profitability on a per-share basis [4]. Group 2: Cash Flow Analysis - The company has demonstrated poor cash profitability, with an average free cash flow margin of 7.8% over the last two years, which is considered inadequate for a semiconductor business [6]. - Limited free cash flow restricts Allegro MicroSystems' ability to return capital to shareholders, impacting its reinvestment potential [5]. Group 3: Valuation and Market Position - Following the recent stock rally, Allegro MicroSystems is trading at a forward P/E ratio of 36, indicating that the stock may be overvalued with much of the positive outlook already priced in [7]. - Analysts suggest that there are more timely investment opportunities available compared to Allegro MicroSystems [7].

Core Viewpoint - Allegro MicroSystems, Inc. (ALGM) shows potential for significant upside, with a mean price target of $38.75 indicating a 33.9% increase from its current price of $28.94 [1] Price Targets and Analyst Consensus - The average price target consists of 12 estimates ranging from $35.00 to $49.00, with a standard deviation of $4.14, suggesting a variability in analyst predictions [2] - The lowest estimate indicates a 20.9% increase, while the highest suggests a 69.3% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about ALGM's earnings prospects, with a positive trend in earnings estimate revisions [11] - Over the last 30 days, one estimate has increased, leading to a 7.8% rise in the Zacks Consensus Estimate [12] - ALGM holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are a common tool for investors, they can often mislead, as empirical research indicates they rarely predict actual stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]