Allegro MicroSystems, Inc. ranks below the peer group median, with strong valuation offset by weak profitability.
Peer-relative scores, weakest to strongest
Allegro MicroSystems designs and manufactures sensor and power semiconductor solutions, with a focus on automotive and xEV applications.
The market prices Allegro MicroSystems on growth momentum without sustainable capital returns, viewing it as a cyclical laggard rather than a quality leader. With an operating margin of 11.5% (declining trend vs. peers, FY26) and ROIC at 4.2% (trails peer median over FY25–26), the market assigns Allegro a discount because it consistently rewards peers that deliver higher profitability and capital efficiency, reacting to Allegro’s weaker business model discipline by maintaining a lower valuation despite strong revenue growth. In the semiconductor sector focused on automotive sensors and xEV components, peer-relative quality is critical; Allegro lags larger competitors like Texas Instruments in capital returns and margins, which keeps the stock at a valuation discount. Only a sustained improvement in capital returns and margins to peer levels would break the current valuation framing.
Break down ALGM's position across all dimensions with the full interactive tool.
This analysis is rule-based and descriptive. Peer-relative scores are derived from functional peer group comparisons using publicly available financial data. Scores reflect structural positioning only and do not constitute investment advice, a buy or sell recommendation, or a forecast of future performance. AssetNext peer scores are recalculated periodically as new data becomes available.
AssetNext scores reflect each company's structural position within its functional peer group — not a ranking against all stocks simultaneously. Peers are identified by similarity across eight financial dimensions, including revenue growth trajectory, margin structure, capital intensity, and earnings stability. A score of 75 means the company ranks in the top quartile within its own peer group, not the entire market.
Four dimension scores drive the overall peer score: Growth (revenue trajectory and expansion dynamics), Quality (margin structure and capital efficiency), Valuation (peer-relative pricing on standard multiples), and Stability (earnings consistency and financial predictability). Each dimension is scored 0–100 relative to the peer group, then combined into an overall peer score using equal weighting.
Because scores are peer-relative, the same company can have slightly different scores in different index universes. On comparison pages, both companies are shown within their shared peer universe wherever possible — so the scores are directly comparable. The peer basis is stated on each score card.
Scores are recalculated periodically as underlying financial data is updated. All analysis is descriptive and rule-based — AssetNext describes structural realities and never issues buy, sell or hold recommendations.