Wall Street Analysts See a 33.9% Upside in Allegro MicroSystems (ALGM): Can the Stock Really Move This High?

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]