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Allegro MicroSystems, Inc. (ALGM) Plunges More Than Broader Markets: What You Need to Know

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In the last trading session, Allegro MicroSystems, Inc. (ALGM) closed at $29.86, marking a -1.26% move from the previous day. The change lagged the S&P 500’s daily 0.41% loss. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq lost 6.67%.

As of today, the company’s shares had gained 0.6% over the past month. Over the same period, the IT & Technology sector lost 6.38%, while the S&P 500 lost 4.4%.

Allegro MicroSystems, Inc. will be looking to show strength as we approach our next earnings release. The company is expected to post EPS of $0.32, up 68.42% from the prior year quarter. Our most recent consensus estimate calls for quarterly revenue of $245.4 million, up 66.75% from the prior year period.

Looking to the full year, our Zacks consensus estimates suggest analysts are expecting earnings of $1.18 per share and revenue of $953 million. These totals would mark changes of +51.28% and +30.69%, respectively, from last year.

Any recent changes in analyst estimates for Allegro MicroSystems, Inc. should also be noted by investors. These revisions help show the ever-changing nature of short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business outlook.

Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. Over the past few months, the Zacks Consensus EPS estimate has remained stagnant. Allegro MicroSystems, Inc. currently holds a Zacks rating of #1 (Strong Buy).

In terms of valuation, Allegro MicroSystems, Inc. is currently trading at a Forward P/E ratio of 25.63. Its industry sports an average Forward P/E of 13.66, so we could conclude that Allegro MicroSystems, Inc. is trading at a premium comparatively.

The Electronics – Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 163, which places it in the bottom 36% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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