Share count
185Mpeak FY2020
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ALGM, Allegro MicroSystems
Allegro MicroSystems, Inc. is a global leader in the design, development, and marketing of sensor ICs and application-specific power ICs, that enable the sensing, motion control, and power management functions of complex electromechanical or power conversion systems.
We primarily serve automotive and industrial markets, including advanced industrial markets such as AI data centers, robotics, and energy infrastructure, where our solutions enable customers to sense, move, and manage power with efficiency, precision, and reliability.
By embedding system-level intelligence directly into our products, we reduce the number of components required in a customer's design while improving performance, energy efficiency, safety, and reliability.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2026
$890M
+22.8% YoY · 9% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $890M 5-yr avg $881M
Revenue $229M +28.9% vs yr-ago qtr
Operating margin 4.2% yr-ago −0.0%
Net income $8M yr-ago ($7M)
Net margin 3.6% yr-ago −3.8%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Cyclical. Margins collapse and recover repeatedly across the record; a single year, good or bad, misstates the through-cycle earning power.
- What moves the needle
- Gross margin has run about 55% and operating margin about 8.1% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. The margin is cyclical, swinging between −2.7% and 21% over the years, so the through-cycle figure carries more than any single year — and the balance sheet at the trough more than the peak. Inventory runs near 16% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. Read this kind of business on process leadership and the capex cycle. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has run in the teens (median 13%, above 15% in 2 of 5 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 14% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →90% of revenue comes from outside the United States.
Revenue by geography, FY2026
- China28%$249M
- Other Asia18%$158M
- Japan17%$151M
- Europe14%$121M
- United States10%$91M
- South Korea9%$78M
- Other5%$42M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2020–2026
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|
| Income statement | ||||||||
| $650M | $591M | $769M | $974M | $1.0B | $725M | $890M | $890M | RevenueRevenue |
| 40% | 57% | 63% | 64% | 55% | 44% | 46% | 46% | Gross marginGross mgn |
| 16% | 26% | 19% | 20% | 18% | 22% | 20% | 20% | SG&A / revenueSG&A/rev |
| 16% | 18% | 16% | 15% | 17% | 25% | 23% | 23% | R&D / revenueR&D/rev |
| $53M | $12M | $137M | $203M | $196M | ($20M) | $18M | $18M | Operating incomeOp. inc. |
| 8.1% | 2.1% | 17.8% | 20.9% | 18.7% | −2.7% | 2.1% | 2.1% | Operating marginOp. mgn |
| $37M | $18M | $119M | $187M | $153M | ($73M) | ($15M) | ($15M) | Net incomeNet inc. |
| 30% | — | 15% | 11% | 22% | — | — | — | Effective tax rateTax rate |
| Cash flow & returns | ||||||||
| $81M | $121M | $156M | $193M | $182M | $62M | $163M | $163M | Operating cash flowOp. cash |
| $64M | $48M | $49M | $51M | $71M | $65M | $68M | $68M | DepreciationDeprec. |
| ($21M) | $4M | ($45M) | ($107M) | ($85M) | $29M | $62M | $62M | Working capital & otherWC & other |
| $46M | $41M | $70M | $80M | $125M | $40M | $38M | $38M | CapexCapex |
| 7.0% | 6.9% | 9.1% | 8.2% | 11.9% | 5.5% | 4.3% | 4.3% | Capex / revenueCapex/rev |
| $36M | $80M | $108M | $142M | $110M | $22M | $125M | $125M | Owner earningsOwner earn. |
| 5.5% | 13.5% | 14.0% | 14.6% | 10.5% | 3.0% | 14.0% | 14.0% | Owner earnings marginOE mgn |
| $36M | $80M | $86M | $113M | $57M | $22M | $125M | $125M | Free cash flowFCF |
| 5.5% | 13.5% | 11.2% | 11.7% | 5.4% | 3.0% | 14.0% | 14.0% | Free cash flow marginFCF mgn |
| $0 | $12M | $15M | $20M | $408M | $0 | $0 | $0 | AcquisitionsAcquis. |
| $0 | $400M | $0 | $0 | — | — | — | $0 | Dividends paidDiv. paid |
| — | — | — | $0 | $0 | $854M | $0 | — | BuybacksBuybacks |
| 8% | — | 24% | 28% | 13% | -1% | — | — | ROICROIC |
| 6% | 3% | 16% | 19% | 14% | -8% | -2% | -2% | Return on equityROE |
| 6% | −65% | 16% | 19% | — | — | — | −2% | Retained to equityRetained/eq |
| Balance sheet | ||||||||
| $214M | $197M | $295M | $372M | $212M | $121M | $169M | $169M | Cash & investmentsCash+inv |
| $59M | $70M | $87M | $111M | $119M | $85M | $93M | $93M | ReceivablesReceiv. |
| $127M | $87M | $86M | $151M | $162M | $184M | $182M | $182M | InventoryInvent. |
| $21M | $35M | $30M | $56M | $36M | $39M | $44M | $44M | Accounts payablePayables |
| $166M | $122M | $144M | $206M | $245M | $230M | $231M | $231M | Operating working capitalOper. WC |
| $448M | $431M | $512M | $666M | $572M | $483M | $504M | $504M | Current assetsCur. assets |
| $150M | $117M | $104M | $165M | $118M | $112M | $146M | $146M | Current liabilitiesCur. liab. |
| 3.0× | 3.7× | 4.9× | 4.0× | 4.9× | 4.3× | 3.5× | 3.5× | Current ratioCurr. ratio |
| $1M | $20M | $20M | $28M | $202M | $202M | $203M | $203M | GoodwillGoodwill |
| $818M | $748M | $893M | $1.2B | $1.5B | $1.4B | $1.4B | $1.4B | Total assetsAssets |
| $43M | $25M | $25M | $25M | $254M | $346M | $287M | $287M | Total debtDebt |
| ($171M) | ($172M) | ($270M) | ($347M) | $41M | $225M | $119M | $119M | Net debt / (cash)Net debt |
| — | 3.2× | 54.7× | 87.0× | 18.2× | -0.7× | 0.8× | 0.8× | Interest coverageInt. cov. |
| $633M | $586M | $734M | $966M | $1.1B | $930M | $955M | $955M | Shareholders’ equityEquity |
| 0.2% | 8.4% | 4.4% | 6.3% | 4.0% | 5.8% | 5.4% | 5.4% | Stock comp / revenueSBC/rev |
| Per share | ||||||||
| 200M | 176M | 192M | 194M | 195M | 188M | 185M | 185M | Shares out (diluted)Shares |
| $3.25 | $3.35 | $4.01 | $5.03 | $5.39 | $3.86 | $4.81 | $4.81 | Revenue / shareRev/sh |
| $0.18 | $0.10 | $0.62 | $0.97 | $0.78 | $-0.39 | $-0.08 | $-0.08 | EPS (diluted)EPS |
| $0.18 | $0.45 | $0.56 | $0.74 | $0.57 | $0.12 | $0.67 | $0.67 | Owner earnings / shareOE/sh |
| $0.18 | $0.45 | $0.45 | $0.59 | $0.29 | $0.12 | $0.67 | $0.67 | Free cash flow / shareFCF/sh |
| $0.00 | $2.27 | $0.00 | $0.00 | — | — | — | $0.00 | Dividends / shareDiv/sh |
| $0.23 | $0.23 | $0.36 | $0.41 | $0.64 | $0.21 | $0.21 | $0.21 | Cap. spending / shareCapex/sh |
| $3.17 | $3.32 | $3.83 | $4.99 | $5.81 | $4.95 | $5.16 | $5.16 | Book value / shareBVPS |
Share counts before 2021 are restated ×20 for a stock split, so per-share figures sit on one basis.
Per-share growththe realized rate an owner's share compounded
| 6-yr | 5-yr | |
|---|---|---|
| Revenue / share | +6.8%/yr | +7.5%/yr |
| Owner earnings / share | +24.8%/yr | +8.3%/yr |
| Capital spending / share | −1.7%/yr | −2.2%/yr |
| Book value / share | +8.5%/yr | +9.2%/yr |
The year, in the company's words
the filing →Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.
- Japan-1.9%
“Japan net sales declined primarily in personal and industrial transport products, and safety, comfort and convenience applications, partially offset by an increase in data center applications and ADAS components.”
✓ direction matches the filed record - Europe+13.0%
“Europe net sales increased primarily in Automotive markets, driven by ADAS and xEV components, as well as growth in industrial automation and robotics and internal combustion engine products, partially offset by decreases in consumer products, clean energy applications, and safety, comfort and convenience applications.”
✓ direction matches the filed record - South Korea+5.8%
“South Korea net sales increased primarily in xEV components and safety, comfort and convenience applications, partially offset by a decrease in ADAS components.”
✓ direction matches the filed record
The record, charted
FY2020–2026Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.
ROIC
−1%low FY2025
Gross margin
46%low FY2020
Net debt ÷ owner earnings
0.9×peak FY2025
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$125Mowner earningsvs.($15M)net incomelow FY2025
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cashEach year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.
FY2020FY2026
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business turned a $15M loss into $125M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2026 | FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|---|
| Reported net income | ($15M) | ($73M) | $153M | $187M | $119M |
| Depreciation & amortizationnon-cash charge added back | +$68M | +$65M | +$71M | +$51M | +$49M |
| Stock-based compensationreal costnon-cash, but a real cost | +$48M | +$42M | +$42M | +$62M | +$34M |
| Working capital & othertiming of cash in and out, other non-cash items | +$62M | +$29M | −$85M | −$107M | −$45M |
| Cash from operations | $163M | $62M | $182M | $193M | $156M |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −$38M | −$40M | −$71M | −$51M | −$49M |
| Owner earnings | $125M | $22M | $110M | $142M | $108M |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | — | — | −$53M | −$29M | −$21M |
| Free cash flow | $125M | $22M | $57M | $113M | $86M |
| Owner-earnings marginowner earnings ÷ revenue | 14% | 3% | 11% | 15% | 14% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $48M), owner earnings is nearer $77M.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2026 10-K · source on SEC EDGAR →
Will it survive?
- Does not cover its interestOperating income $18M ÷ interest expense $22M
What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
- How heavy is the debt, net of cash? $119M · 6.4× operating profitHeavy net debtCash $169M − debt $287M
What this means
Netting $169M of cash and short-term investments against $287M of debt leaves $119M owed, about 6.4× a year's operating profit (15.5× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 38 + DIO 139 − DPO 34 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Solid through the cycle5-yr median, range -1%–28%; the latest year is left out — large non-operating charges put its operating line well above pretax profitIndustry peers: median 9%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years, so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid through the cycle7-yr median margin, range 3%–15%; latest $125M = operating cash $163M − maintenance capex $38MIndustry peers: median 16%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 14% of revenue this year, a 14% median across 7 years. Treating stock comp as the real expense it is (less $48M of SBC) leaves $77M.
- Loss, but cash-generativeNet income ($15M) · cash from operations $163M
What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did.
How is the cash used?
- Reinvests most of itDividends + buybacks $0 ÷ Owner Earnings $125M
What this means
Of $125M Owner Earnings, $0 (0%) went back to shareholders, $0 dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.56×HarvestingCapex $38M ÷ depreciation $68M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $890M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 3.45×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $287M vs $358M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (7-yr record) · 2 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 1 of 7 yrs
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −63%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.12/share (latest year $-0.08), the averaged base the calculator's gate runs on, and book value is $5.13/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 7
What this means
Lost money in 2 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 2 of 7 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 9% → 6% (3-yr avg ends)
What this means
Through the cycle the operating margin slipped — about 9% early to 6% lately, median 8% — competition or costs are biting in.
- Reinvestment, incremental ROIC −0%
What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
- Owner earnings growth +4%/yr
What this means
Owner earnings grew about 4% a year over the record.
- Worst year 2025 · −2.7% op. margin
What this means
Operations went underwater in 2025, understand why before trusting the good years.
- Dividend record paid
What this means
Paid a dividend in 1 of the years on record.
- How management talks about it Owner’s terms
What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing A competitive risk, new this year
Its FY2026 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.
“Varying combinations of these resources provide advantages to these competitors, such as the rapid implementation of AI strategies for developing products and service offerings, which may enable them to influence industry trends and the pace at which they adapt to those trends.”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Mar 27, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$504M
- Cash & short-term investments$169M
- Receivables$93M
- Inventory$182M
- Other current assets$60M
Current liabilities$146M
- Debt due within a year$2M
- Accounts payable$44M
- Other current liabilities$100M
Current ratio3.45×all current assets ÷ what's due · Graham looked for 2×
Quick ratio2.21×stricter: inventory excluded
Cash ratio1.16×strictest: cash alone against what's due
Working capital$358Mthe cushion left after near-term bills
Debt due this year vs. cash$2M due · $169M cash
covered by cash on hand, no refinancing forced · both figures from the Mar 27, 2026 balance sheet
Revenue, latest quarter vs. a year ago+28.9%the freshest read on whether the business is still growing
Current ratio, recent quarters4.6× → 3.5×
Deeper floors
Tangible book value$513Mequity stripped of goodwill & intangibles
Net current asset value$44MGraham's net-net: current assets less all liabilities
Debt incl. operating leases$306M$19M of it operating leases
From the company's latest filing.
How the cash was used, 2020–2026
Over the record, the business generated $958M of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.
- Reinvested$439M · 46%
- Dividends$400M · 42%
- Buybacks$854M · 89%
- Returned to owners$1.3B
201% of the owner earnings the business produced over the span, $400M as dividends and $854M as buybacks.
- Source of funding−$735M
Reinvestment and shareholder returns ran $735M beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $43M to $287M.
- Average price paid for buybacks—
Buybacks ran $854M over the span, but the filings don't tag the share count needed to deduce the average price paid.
- Net change in share count−7.5%
The diluted count fell from 200M to 185M, so the buybacks outran the stock issued to staff.
- Dividend record$0.00/sh
Paid in 1 of the years on record. It was cut at least once along the way.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Acquisitions & goodwill
from the balance sheet & the 7-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$442M31% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity21%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$454Mover 7 years buying other businesses, against $439M of capital spent building
None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 7-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|
| 2022 | $11.2M | $21.1M | $108M |
| 2022 | $10.1M | $22.7M | $108M |
| 2024 | $7.0M | −$4.3M | $110M |
| 2025 | $11.0M | $9.6M | $22M |
| 2025 | $2.9M | $1.8M | $22M |
| 2026 | $10.5M | $13.2M | $125M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Insider ownership0.5%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- CEO pay ratio1,410:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
- Stock-based compensation$48M
The slice of the business handed to employees in shares this year, 5% of revenue, equal to 259% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why Allegro MicroSystems is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2026.
1 of the 6 tests turned up something to look into; the other 5 came back clean.
- Look hereDid debt outgrow the business?$43M → $287M
Debt rose from $43M to $287M while owner earnings went from about $74M to $86M — about 0.6 years of owner earnings in debt then, about 3.4 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
And these came back clean
- Is it less profitable than it was?
- Did the share count rise anyway?
- Did reported profit become cash?
- Did receivables and inventory outpace sales?
- Are "one-time" charges a yearly habit?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
What an owner would ask, FY2026
read the 10-K →- Which reported numbers are a judgment call?Management names Income taxes, Acquisitions, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Semiconductors
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| SYNASynaptics | $1.1B | 43% | 4.1% | 8% | 12% |
| SMTCSemtech Corporation | $1.0B | 60% | 11.8% | 9% | 16% |
| IPGPIPG Photonics Corporation | $1.0B | 46% | 17.9% | 10% | 16% |
| MTSIMACOM Technology Solutions Holdings Inc. | $967M | 52% | 11.7% | 4% | 20% |
| ICHRIchor Holdings | $948M | 15% | 5.2% | 11% | 4% |
| ALGMAllegro MicroSystems | $890M | 55% | 8.1% | 13% | 14% |
| ALABAstera Labs Inc. | $853M | 75% | -27.4% | 14% | 11% |
| SLABSilicon Laboratories | $785M | 59% | 3.2% | 2% | 17% |
| Group median | — | 54% | 6.7% | 9% | 15% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Allegro MicroSystems has delivered.
$
Through the cycle, Allegro MicroSystems earns about $120M on its 13.5% median owner-earnings margin. This year’s 14.0% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’22→’26−12%/yr
Owner-earnings growth · ’20→’26+4%/yr
Owner-earnings growth · ’20→’26+4%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’24–’26)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $125M on 186M shares outstanding, per the 10-K cover, as of 2026-05-18; net debt $119M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Allegro MicroSystems (ALGM), the owner's record," https://ownerscorecard.com/c/ALGM, data as of 2026-07-09.
Manual order: ← ALG its page in the Manual ALGN →
Industry order: ← ALAB the Semiconductors chapter ALMU →