ALGM
Allegro MicroSystems, Inc.
$34.51
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 163.2% above fair value
You pay
$34.51
Bear
$10.14
Fair
$13.11
Bull
$15.91
Bear
$10.14
-70.6%
5% stage 1 growth, 12% discount
Fair
$13.11
-62.0%
9% stage 1 growth, 12% discount
Bull
$15.91
-53.9%
11% stage 1 growth, 12% discount
Adjust Assumptions
8.5%
12.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
33%
Implied Market Multiple
43.3x
Market is pricing in (growth)
21.3%
vs 8.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$54.00
Divergence from AlphaVal
76%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $13.11 per share.
Warnings
Wall Street's average price target is $54.00 (from 13 analysts). Our estimate is 76% below the consensus -- consider that gap carefully.
This stock is 52% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions