Should I Buy ALGM? ALGM 2026 Analysis

Should You Buy Allegro Microsystems Inc (ALGM) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

37.980

1 Day change

9.93%

52 Week Range

39.890

Analysis Updated At

2026/01/28

Not a good buy right now for a beginner long-term investor who wants to act immediately. The chart is constructive (bullish moving averages and price above key pivot), and Wall Street remains broadly positive with rising targets, but the near-term setup is dominated by (1) a major earnings catalyst on 2026-01-29 pre-market, (2) heavy put open interest (bearish/hedged positioning), and (3) accelerating insider selling plus weak profitability trends in the latest reported quarter. If you must initiate exposure today, this is better treated as a small starter position only, not an aggressive full buy, with the expectation that earnings will determine the next durable direction.

Technical Analysis

Trend is bullish-to-neutral near-term. Moving averages are stacked bullish (SMA_5 > SMA_20 > SMA_200), implying the intermediate and long trend is up. RSI(6) at ~55 is neutral (not overbought), leaving room for upside without being stretched. MACD histogram is above zero (bullish momentum), but it is positively contracting, suggesting upside momentum is slowing rather than accelerating. Key levels: Pivot 32.619 is the line in the sand; holding above it keeps the bullish bias. Resistance sits at 34.308 (R1) then 35.351 (R2). Support is 30.931 (S1) then 29.888 (S2). With pre-market at ~33.5 (+2.57%), price is closer to R1 than support, which reduces the margin of safety for an impatient long-term entry before earnings.

Options Data

Bearish

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Options positioning is mixed but tilts cautious on positioning: Open interest put/call at 7.23 is extremely high, indicating large outstanding put positioning (often hedging or bearish conviction) relative to calls. However, today’s option volume put/call at 0.46 shows more calls trading than puts in the session, which can reflect short-term bullish speculation into the move. Implied volatility is elevated (30D IV ~58 vs historical vol ~46), and volume vs 30-day average is very high, consistent with traders paying up for protection/participation ahead of the 2026-01-29 earnings catalyst.

Technical Summary

Sell

Buy

Positive Catalysts

Technical backdrop is constructive (bullish MA stack; price above pivot).
Analyst sentiment is supportive with multiple Buy/Overweight/Outperform ratings and several price-target increases, implying expected improvement in leading indicators and content gains.
Sector/news backdrop: commentary points to semis moving toward balanced supply-demand and modest earnings rebounds expected in 2026; broader AI investment theme remains strong.
Pattern-based projection supplied: +10.46% bias over the next month (probabilistic, not certain).

Neutral/Negative Catalysts

Earnings on 2026-01-29 pre-market is the dominant near-term event and can override technicals either direction.
Latest reported quarter shows revenue up but sharp deterioration in profitability (net income and EPS down heavily YoY), which can keep a lid on valuation expansion until margins/EPS stabilize.
Insiders are selling and the selling amount increased ~129.72% over the last month (negative behavioral signal).
Options open-interest skew is heavily put-dominated (put/call OI 7.23), signaling substantial hedging/bearish positioning into the catalyst.
Auto/EV demand uncertainty noted by at least one analyst (mixed outlook and EV headwinds), which matters given ALGM’s exposure.

Financial Performance

Latest provided quarter: 2026/Q2. Revenue grew to $214.294M (+14.36% YoY), and gross margin improved to 46.33% (+1.36% YoY), which are constructive on the top line and product/mix. However, profitability deteriorated sharply: net income fell to $6.519M (-119.36% YoY) and EPS to $0.03 (-116.67% YoY). In short: growth is present, but earnings power is currently weak versus last year, which increases reliance on a forward rebound narrative (and makes upcoming earnings guidance especially important).

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Recent trend is net positive: multiple firms reiterated Buy/Overweight/Outperform and several raised price targets (e.g., BofA to $39 from $36 on 2026-01-21; UBS to $40; TD Cowen to $35; Barclays to $35; Wells Fargo highlights a positive catalyst path and keeps $40; Evercore raised to $49). One notable negative change: Mizuho trimmed its target to $38 from $40 (still Outperform) citing EV headwinds and mixed 2026 outlook. Wall Street pros: improving indicators, industrial rebound, pricing, content gains, and data center/power architecture opportunities. Wall Street cons: EV/auto demand uncertainty and the need for margin/EPS recovery to validate higher targets.

7 Analyst Rating

Wall Street analysts forecast ALGM stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ALGM is 39.14 USD with a low forecast of 35 USD and a high forecast of 49 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

7 Buy

0 Hold

0 Sell

Strong Buy

Current: 34.550

Low

Averages

39.14

High

Current: 34.550

Low

Averages

39.14

High

Barclays

Tom O'Malley

Overweight

maintain

$35 -> $46

AI Analysis

2026-01-30

New

Reason

Barclays

Tom O'Malley

Price Target

$35 -> $46

AI Analysis

2026-01-30

New

maintain

Overweight

Reason

Barclays analyst Tom O'Malley raised the firm's price target on Allegro MicroSystems to $46 from $35 and keeps an Overweight rating on the shares following the earnings report. The company's auto business continues to grow with an emerging data center "story as gravy on top," the analyst tells investors in a research note.

BofA

Vivek Arya

Buy

maintain

$36 -> $39

2026-01-21

Reason

BofA

Vivek Arya

Price Target

$36 -> $39

2026-01-21

maintain

Buy

Reason

BofA analyst Vivek Arya raised the firm's price target on Allegro MicroSystems to $39 from $36 and keeps a Buy rating on the shares. The firm raised price targets for most of its diversified analog semi stock coverage, noting that it expects modest calendar Q4 beats and Q1 raises across the board led by industrial semis given ongoing rebounds across most subsegments, favorable pricing, and robust growth in strategic AI businesses.

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ALGM Should I Buy

ALGM Should I Buy

Should You Buy Allegro Microsystems Inc (ALGM) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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