GET DAILY SIGNALSAllegro MicroSystems (ALGM) Delivers +29% Revenue Growth in Fiscal Second Quarter
Key Takeaways
- Allegro MicroSystems reported second-quarter fiscal 2027 revenue of roughly $277 million, up 29% year over year and above the high end of its guidance range.
- Non-GAAP (adjusted) earnings per share reached $0.26, doubling from $0.13 a year earlier, while GAAP diluted EPS rose to $0.12 from $0.03.
- Data center sales hit a record $46 million, growing more than 150% year over year, while industrial and other sales climbed 79% to a record $104 million.
- Management guided third-quarter revenue to $278 million to $288 million and non-GAAP EPS to $0.25 to $0.29.
- Bookings rose 50% year over year and design wins increased nearly 40%, supporting management's confidence in mid-teens annual sales growth.
Why These Results Stand Out
Allegro MicroSystems, a designer of magnetic sensor and analog power semiconductors, has become a key beneficiary of rising demand in electric vehicles, advanced driver-assistance systems, and artificial intelligence data-center infrastructure. Its fiscal second-quarter 2027 report, covering the period ended September 25, 2026, marked the company's seventh consecutive quarter of sequential sales growth. I have been watching closely to see whether that momentum can continue as the company scales its higher-margin data-center and industrial businesses while managing automotive inventory dynamics and margin expansion. The results provided fresh evidence on both the durability of demand and the company's ability to convert revenue growth into stronger profitability. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Quarter
Allegro delivered second-quarter fiscal 2027 net sales of $276.9 million, an increase of 29% from $214.3 million in the prior-year period and above consensus expectations of roughly $270.8 million. Non-GAAP (adjusted) earnings per share came in at $0.26, doubling from $0.13 a year ago, while GAAP (Generally Accepted Accounting Principles) diluted EPS rose to $0.12 from $0.03.
Non-GAAP gross margin expanded 190 basis points year over year to 51.5%, supported by operating leverage. Automotive sales grew 11% year over year to $173 million, while industrial and other sales surged 79% to a record $104 million. Data center revenue reached a record $46 million, up more than 150% year over year, and management reiterated expectations to more than double data-center sales in fiscal 2027. For the third quarter, the company guided to revenue of $278 million to $288 million and non-GAAP EPS of $0.25 to $0.29.
How the Market Responded
Despite a clear top- and bottom-line beat, market coverage indicated that ALGM shares came under pressure in the immediate aftermath of the report, suggesting investors had priced in strong execution ahead of the release. The report reinforced a constructive narrative: record data-center sales, a first-ever quarter above $100 million in industrial and other revenue, and sharply higher bookings and design wins. Still, the tempered initial reaction reflects elevated expectations and a degree of caution around valuation and the timing of certain larger data-center program ramps that were pushed out by one or two quarters. Management described those delays as timing-related, with programs still expected to ramp in the near future.
Looking Ahead
Allegro's forward guidance points to continued growth, with third-quarter revenue expected between $278 million and $288 million and non-GAAP EPS between $0.25 and $0.29. Management also cited a robust backlog and strengthening demand signals as evidence supporting its target of mid-teens annual sales growth over time.
Investors should monitor several key factors in the quarters ahead. First, the pace of data-center adoption remains central, particularly given the timing shifts in larger 800-volt hyperscaler programs. Second, automotive inventory levels and any signs of restocking will be important, since management noted customer inventories remain lean. Third, margin progression toward the company's long-term target of above 55% gross margin will hinge on manufacturing cost reductions, pricing actions, and product mix.
Finally, the company's growing exposure to electrified vehicles, advanced driver-assistance systems, robotics, and energy infrastructure broadens its addressable market, but also ties its trajectory to the health of those end markets. While the reported results were strong, near-term sentiment may remain sensitive to the pace at which recently won designs convert into shipped revenue.
Exploring AI Tools in My Research
I often turn to Tickeron’s AI Screener when evaluating semiconductor names like ALGM. It lets me quickly filter for technical patterns, fundamentals, and performance metrics across the sector, helping surface comparable ideas without manual effort. This kind of tool fits naturally into my workflow for spotting trends in data-center and industrial exposure.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
ALGM in upward trend: price expected to rise as it breaks its lower Bollinger Band on October 14, 2026
ALGM may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In 31 of 35 cases where ALGM's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are 89%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ALGM's RSI Indicator exited the oversold zone, 29 of 33 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 88%.
Following a +9.44% 3-day Advance, the price is estimated to grow further. Considering data from situations where ALGM advanced for three days, in 258 of 317 cases, the price rose further within the following month. The odds of a continued upward trend are 81%.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 49 of 60 cases where ALGM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 82%.
The Momentum Indicator moved below the 0 level on October 30, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on ALGM as a result. In 66 of 74 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 89%.
The Moving Average Convergence Divergence Histogram (MACD) for ALGM turned negative on October 30, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In 40 of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at 85%.
ALGM moved below its 50-day moving average on October 29, 2026 date and that indicates a change from an upward trend to a downward trend.
The 50-day moving average for ALGM moved below the 200-day moving average on September 24, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ALGM declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 82%.
The Aroon Indicator for ALGM entered a downward trend on September 25, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 64 (best 1 - 100 worst), indicating fairly steady price growth. ALGM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 81 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 89 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 98 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ALGM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock worse than average.
The Tickeron Valuation Rating of 100 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.902) is normal, around the industry mean (6.050). ALGM's P/E Ratio (381.625) is considerably higher than the industry average of (18.007). ALGM's Projected Growth (PEG Ratio) (22.820) is slightly higher than the industry average of (3.761). Dividend Yield (0.000) settles around the average of (0.011) among similar stocks. P/S Ratio (6.485) is also within normal values, averaging (45.794).
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