ALGM
Allegro MicroSystems, Inc.
$36.61
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 179.0% above fair value
You pay
$36.61
Bear
$10.15
Fair
$13.12
Bull
$15.92
Bear
$10.15
-72.3%
5% stage 1 growth, 12% discount
Fair
$13.12
-64.2%
9% stage 1 growth, 12% discount
Bull
$15.92
-56.5%
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
45.9x
Market is pricing in (growth)
22.1%
vs 8.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (13 analysts)
$56.17
Divergence from AlphaVal
77%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $13.12 per share.
Warnings
Wall Street's average price target is $56.17 (from 13 analysts). Our estimate is 77% below the consensus -- consider that gap carefully.
This stock is 49% 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