Allegro MicroSystems, Inc. Fundamental Analysis (NASDAQ: ALGM)
Allegro MicroSystems, Inc. (NASDAQ: ALGM) shows weak financial fundamentals with a PE ratio of 193.91, profit margin of 3.07%, and ROE of 3.18%. The company generates $1.0B in annual revenue with weak year-over-year growth of -30.91%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 2.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze ALGM's fundamental strength across five key dimensions:
Efficiency Score
WeakALGM struggles to generate sufficient returns from assets.
Valuation Score
ModerateALGM shows balanced valuation metrics.
Growth Score
WeakALGM faces weak or negative growth trends.
Financial Health Score
ExcellentALGM maintains a strong and stable balance sheet.
Profitability Score
WeakALGM struggles to sustain strong margins.
Key Financial Metrics
Is ALGM Expensive or Cheap?
P/E Ratio
ALGM trades at 193.91 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, ALGM's PEG of 0.26 indicates potential undervaluation.
Price to Book
The market values Allegro MicroSystems, Inc. at 5.98 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 44.11 times EBITDA. This signals the market has high growth expectations.
How Well Does ALGM Make Money?
Net Profit Margin
For every $100 in sales, Allegro MicroSystems, Inc. keeps $3.07 as profit after all expenses.
Operating Margin
Core operations generate 8.73 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $3.18 in profit for every $100 of shareholder equity.
ROA
Allegro MicroSystems, Inc. generates $2.14 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Allegro MicroSystems, Inc. produces operating cash flow of $140.42M, showing steady but balanced cash generation.
Free Cash Flow
Allegro MicroSystems, Inc. generates strong free cash flow of $104.92M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.56 in free cash annually.
FCF Yield
ALGM converts 1.75% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
193.91
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.98
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.94
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.29
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.13
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.03
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How ALGM Stacks Against Its Sector Peers
| Metric | ALGM Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 193.91 | 32.70 | Worse (Expensive) |
| ROE | 3.18% | 758.00% | Weak |
| Net Margin | 3.07% | -4312.00% (disorted) | Weak |
| Debt/Equity | 0.29 | 0.96 | Strong (Low Leverage) |
| Current Ratio | 4.13 | 12.15 | Strong Liquidity |
| ROA | 2.14% | 1067467.00% | Weak |
ALGM outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Allegro MicroSystems, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
12.55%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-299.29%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-23.26%
Industry Style: Growth, Innovation, High Beta
Declining