Yahoo Finance Revenue Downgrade: Here's What Analysts Forecast For Allegro MicroSystems, Inc. (NASDAQ:ALGM)
Today is shaping up negative for Allegro MicroSystems, Inc. (NASDAQ:ALGM) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the latest downgrade, the current consensus, from the six analysts covering Allegro MicroSystems, is for revenues of US$818m in 2025, which would reflect a stressful 22% reduction in Allegro MicroSystems' sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 78% to US$0.17 in the same period. Before this latest update, the analysts had been forecasting revenues of US$937m and earnings per share (EPS) of US$0.37 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
Check out our latest analysis for Allegro MicroSystems
It'll come as no surprise then, to learn that the analysts have cut their price target 6.5% to US$35.86.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Allegro MicroSystems' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 22% by the end of 2025. This indicates a significant reduction from annual growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that Allegro MicroSystems' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Allegro MicroSystems. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Allegro MicroSystems after today.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Allegro MicroSystems going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
