Complete ALGM Stock Valuation Analysis
Comprehensive intrinsic value analysis using 3 different methodologies
ALGM DCF Analysis
ALGM (Allegro MicroSystems, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $768.7M | $973.7M | $1.0B | $1.2B | $1.4B | $1.6B | $1.8B | $2.0B |
| Revenue Growth % | - | 26.7% | 7.8% | 16.2% | 14.6% | 13.1% | 11.8% | 10.6% |
| EBIT | $136.7M | $203.3M | $209.5M | $238.3M | $274.4M | $312.0M | $350.7M | $389.9M |
| EBIT Margin % | 17.8% | 20.9% | 20.0% | 19.5% | 19.6% | 19.7% | 19.8% | 19.9% |
| Tax Rate % | 15.1% | 11.3% | 21.5% | 20.6% | 21.1% | 21.5% | 21.9% | 22.4% |
| NOPAT | $116.1M | $180.4M | $164.4M | $189.1M | $216.6M | $244.9M | $273.7M | $302.6M |
| NOPAT Margin % | 15.1% | 18.5% | 15.7% | 15.5% | 15.5% | 15.5% | 15.5% | 15.5% |
| Capex | $69.9M | $79.8M | $124.8M | $105.1M | $114.4M | $122.9M | $130.6M | $137.2M |
| Capex / Revenue % | 9.1% | 8.2% | 11.9% | 8.6% | 8.2% | 7.8% | 7.4% | 7.0% |
| Depreciation | $48.5M | $50.8M | $71.4M | $74.5M | $85.4M | $96.6M | $108.0M | $119.5M |
| D&A / Revenue % | 6.3% | 5.2% | 6.8% | 6.1% | 6.1% | 6.1% | 6.1% | 6.1% |
| Change in NWC | $93.6M | $93.0M | $-46.2M | $23.8M | $21.9M | $19.8M | $17.7M | $15.7M |
| NWC Change / Revenue % | 12.2% | 9.6% | -4.4% | 2.0% | 1.6% | 1.3% | 1.0% | 0.8% |
| Unlevered FCF | $1.1M | $58.4M | $157.2M | $134.7M | $165.8M | $198.8M | $233.5M | $269.3M |
| UFCF % Chg. | - | 5290.2% | 169.4% | -14.3% | 23.0% | 19.9% | 17.4% | 15.3% |
| FCF / Revenue % | 0.1% | 6.0% | 15.0% | 11.0% | 11.9% | 12.6% | 13.2% | 13.8% |
| Discount Factor | - | - | - | 0.902 | 0.813 | 0.733 | 0.661 | 0.596 |
| Present Value of FCF | - | - | - | $121.5M | $134.7M | $145.7M | $154.3M | $160.4M |
| Sum of PV of UFCF | - | - | - | $121.5M | $256.2M | $401.9M | $556.2M | $716.6M |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 6.0% |
| Tax Rate | 20.6% |
| After Tax Cost of Debt | 4.7% |
| Risk Free Rate | 4.46% |
| Market Risk Premium | 4.3% |
| Beta | 1.57 |
| Cost of Equity | 11.3% |
| Total Debt | $275.2M |
| Market Cap | $5.0B |
| Total Capital | $5.2B |
| Debt Weighting | 5.3% |
| Equity Weighting | 94.7% |
| WACC | 10.9% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $269.3M |
| Terminal Value | $3.3B |
| PV of Terminal Value | $2.0B |
| Cumulative PV of UFCF | $716.6M |
| Net Debt | $63.1M |
| Equity Value | $2.6B |
| Shares Outstanding | 194.7M |
| Implied Share Price | $13 |
| Current Share Price | $27 |
| Implied Upside/(Downside) | -50.1% |
Valuation Summary
$13.40
Implied Price
$26.86
Current Price
-50.1%
Upside/Downside
10.9%
WACC
ALGM Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 11 peer companies in Technology
P/E Ratio
$-12.33
-145.9%
Peer Median: 31.1x
EV/EBITDA
$22.12
-17.6%
Peer Median: 26.0x
P/S Ratio
$37.43
+39.4%
Peer Median: 9.5x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for ALGM's business model and current situation.
Multiple Comparison
| Multiple | ALGM Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | -67.7x | 31.1x | 37.5x | -317.9% | Undervalued |
| EV/EBITDA | 32.0x | 26.0x | 25.2x | 23.0% | Overvalued |
| P/S Ratio | 6.8x | 9.5x | 7.7x | -28.3% | Undervalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $7.36B | 135.7x | 21.7x | 2.0x | |
| $7.12B | 31.1x | 26.0x | 11.0x | |
| $6.38B | 125.0x | 93.6x | 13.1x | |
| $6.04B | 29.5x | 22.0x | 10.0x | |
| $5.15B | 16.4x | 10.2x | 2.7x | |
| $4.97B | 62.8x | 31.1x | 6.8x | |
| $4.86B | 0.0x | 0.0x | 21.1x | |
| $3.53B | 844.7x | 0.0x | 383.7x | |
| $4.06B | 0.0x | 318.8x | 6.2x | |
| $3.47B | 363.2x | 255.6x | 9.5x | |
| $3450.04B | 47.9x | 40.1x | 26.4x |
ALGM Earnings Power Value (EPV)
Normalized earnings-based valuation for sustainable earning power assessment
Earnings Normalization
| Earnings Component | Amount ($B) | Description |
|---|---|---|
| Reported Earnings | 0.2 | Base earnings from financial statements |
| Normalized Earnings | 0.2 | Final normalized earning power |
One-time Items: Remove non-recurring gains/losses
Cyclical Adjustment: Normalize for economic cycle position
EPV Result
$8.78
EPV per Share
$26.86
Current Price
-67.3%
Upside/Downside
8.9%
WACC: 8.9% (calculated from market data)
Confidence: High
Normalized earnings approach
EPV Calculation Breakdown
Enterprise Value Calculation
| Normalized Earnings | $0.2B |
| Cost of Capital | 8.9% |
| Enterprise Value | $1.7B |
Per Share Value
| Enterprise Value | $1.7B |
| Shares Outstanding | 0.2B |
| EPV per Share | $8.78 |
WACC Components
| Cost of Equity | 9.2% |
| After-Tax Cost of Debt | 3.5% |
| Equity Weight | 95.0% |
| Debt Weight | 5.0% |
| WACC | 8.9% |