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    Is Allegro MicroSystems (ALGM) A Bargain As Growth Improves And Guidance Rises?

    Simply Wall St·11/03/2026 07:34:00
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    Allegro MicroSystems (ALGM) is back in focus after issuing third quarter sales guidance of US$278 million to US$288 million, along with second quarter results that showed higher revenue and improved profitability versus last year.

    The guidance and product launches have landed against a choppy backdrop for Allegro MicroSystems, where the share price has risen 19.47% year to date but fallen 18.67% over 30 days and 24.97% over 90 days. At the same time, 1 year total shareholder return sits at 11.09% and the 3 year figure at 23.42%, which points to longer term gains but fading recent momentum.

    Scan a curated set of Allegro-like semiconductor and AI hardware plays that could be positioning for the next leg higher through the 53 AI infrastructure stocks.

    After a sharp year to date climb followed by a steep pullback, Allegro MicroSystems now sits in an awkward middle ground. Is this price already fair for the new guidance and AI products, or does patience make more sense?

    Most Popular Narrative: 21% Undervalued

    On the most followed narrative, Allegro MicroSystems screens as undervalued, with a fair value of about $40.83 against the latest close near $32.15. That gap rests heavily on assumptions about how its AI data center, automotive, and industrial exposure translate into future cash generation.

    Despite Allegro MicroSystems reporting stronger revenue growth, higher gross margin and lower net leverage, the shares trade roughly 69% to 75% above some intrinsic value estimates with no recent insider share purchases. If AI data center, xEV and automation programs do not deliver the mid teens sales CAGR, margin targets above 55% and EPS above US$2 that are now embedded in expectations, the current share price could be difficult to support on future earnings.

    See why 6 investors see Allegro MicroSystems as 21% undervalued.

    Result: Fair Value of $40.83 (UNDERVALUED)

    Still, six straight quarters of sequential revenue growth and record free cash flow could keep pressure on the bearish Allegro MicroSystems narrative if that strength continues.

    Find out about the key risks to this Allegro MicroSystems narrative.

    Next Steps

    Feeling torn between the upbeat fair value case and the lingering concerns around Allegro MicroSystems? Take a closer look at the data, weigh both the potential upside and the flagged issues, and then decide where you stand by checking the 4 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Allegro MicroSystems?

    If Allegro MicroSystems has sharpened your focus, do not stop here. Broader opportunity often sits just outside your current watchlist, waiting for fresh attention.