Update on Allegro Microsystems, Inc. (ALGM)

Accounting-related benefits still helped results in Q3’25

In our June 14th article, Weakness Behind Allegro MicroSystems’ (ALGM) 4Q24 Numbers, we highlighted concerns about inventory credits rising alongside increasing inventories, as well as unusual movements in receivables, pricing allowances, and warranty reserves. Shortly after our analysis, the stock declined and remained rangebound between $20 and $25 before recently breaking above that level.

In its Q3’25 earnings report, ALGM posted non-GAAP EPS of $0.07, beating the consensus estimate by a penny. While guidance for Q4 remains weak, the company suggests a potential turnaround thereafter. However, we continue to observe accounting choices that seem to artificially support results in ways that may not be sustainable.

Let’s get behind ALGM’s numbers…

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