Allegro MicroSystems (NASDAQ: $ALGM) is a leader in the development and manufacture of high-performance power and sensing ICs. Their specialty is magnetic sensor ICs and application-specific analog power ICs, with a focus on the automotive and industrial markets. On Thursday, January 29, 2026, the company released its third-quarter fiscal 2026 results. Here is a deep dive into the results.
Allegro MicroSystems Q3 Results
For the third quarter of fiscal 2026, the company reported an EPS of $0.15, beating estimates of $0.14, more than double the $0.07 reported the same time last year. It also means that the company has beaten EPS estimates in three of the last four quarters.
Q3 revenue came in at $229.21 million, beating estimates by 2.14% and above the $177.87 million reported last year. The company has beaten revenue estimates in three of the last four quarters.
This quarter’s performance was driven by the strength of Automotive sales, which rose 28% YoY, including a 46% YoY increase in e-Mobility. The company also reported strong growth in Industrial sales, which were up 31% YoY.
Commenting on the results, Allegro CEO Mike Doogue stated, “We continued to see growing bookings and backlog, and a significant annual increase in year-to-date design wins. We are excited to provide a deeper look into our longer-term strategy, growth drivers and target model at our upcoming Analyst Day.”
Allegro MicroSystems Outlook
For Q4, the company expects revenue of $230 million to $240 million. At the midrange, this represents a 22% YoY increase. It expects a non-GAAP gross margin of 49% to 51%, operating expense of around $81 million, representing a 3% sequential increase. Interest expense is forecast at around $5 million, while diluted EPS is expected to come in at $0.14 to $0.18.
Commenting on the outlook, Allegro CFO Derek D’Antilio stated, “Earlier this month, we repriced our term loan down another 25 basis points to SOFR plus 175 basis points resulting in an additional $700,000 reduction in annualized interest expense. This repricing reflects our lenders’ confidence in our business model and financial discipline.”
Market Performance
Following the earnings and revenue beat, Allegro shares were up 8.05% to $37.33 as of 9:48 AM in New York. Year to date, the stock is up 41.55%, while over the past six months, the stock has gained 9.79%.
The stock has outperformed the S&P 500 in 2026, which is up 1.36%. Over the past 52 weeks, ALGM shares are up 63.41%. Its current price is above both the 50- and 200-day moving averages of $28.38 and $28.84, respectively.
Analysts are confident about its future, giving it an overall strong buy rating. The analysts forecast a wide range of price targets, with a high of $49 and a low of $35. They forecast an average price of $439.50, which is a 21.58% upside based on the last closing price.
Is Allegro (ALGM) A Buy in 2026?
Allegro remains a key supplier of semiconductors to the automotive and industrial sectors. There has been a rising demand for power sensors and motor drivers, driven by demand from data centers and the automotive sector. With the trend expected to hold for the remainder of the decade, Allegro could potentially be a great addition to a long-term portfolio.
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