Allegro’s recovery looks real on the top line: revenue climbed to $890.1M, up 22.8% year over year. The market has been less decisive, the stock drifted from about $50 down to $41 in a week, because the profit math and the price you pay are still in tension.
The quarter’s most obvious growth engine was Taiwan, which management ties straight to data-center demand.
"Three-Month Period Ended Change June 26, 2026 June 27, 2025 Amount % (Dollars in thousands) Americas: United States $ 25,247 $ 23,774 $ 1,473 6.2 % Other Americas 8,518 8,848 (330 ) (3.7 )% EMEA: Europe 33,369 30,473 2,896 9.5 % Asia: Greater China 65,343 57,569 7,774 13.5 % Japan 44,078 33,653 10,425 31.0 % Taiwan 42,887 13,430 29,457 219.3 % South Korea 21,143 19,603 1,540 7.9 % Other Asia 18,658 16,055 2,603 16.2 % Total net sales $ 259,243 $ 203,405 $ 55,838 27.5 % Taiwan net sales increased in the three-month period ended June 26, 2026 compared to the three-month period ended June 27, 2025, primarily driven by an increase in demand of our data center applications." (Allegro MicroSystems / 10-Q 2026-07-31)
That 219.3% quarterly jump in Taiwan is notable and was a major contributor to the quarter's growth. The growth story isn’t just one geography: management also flags higher demand for current sensor products and its TMR magnetic-position sensors.
Allegro is increasing R&D spending and capital investment, which appears aimed at converting demand into a longer product runway.
"Research and development (\u201cR&D\u201d) expenses increased in the three-month period ended June 26, 2026 compared to the three-month period ended June 27, 2025, primarily due to the increase in R&D personnel costs." (Allegro MicroSystems / 10-Q 2026-07-31)
Trade payables also rose, and the filing notes unpaid capital expenditures of $2.8 million.
"Trade accounts payable increased primarily due to the timing of payments to suppliers and vendors, including unpaid capital expenditures of $2.8 million." (Allegro MicroSystems / 10-Q 2026-07-31)
Embed: quick snapshot of the last fiscal year’s revenue and margins follows.
That activity helps explain the swingy six-year trend: revenue hit $1.0B in 2024, plunged to $725.0M in 2025, then recovered to $890.1M in 2026. But margins haven’t stabilized, gross margin sits at 46.3%, operating margin at a thin 2.1%, and the company posted a negative net margin of -1.7% in the latest year. Diluted shares fell a touch (-1.4%), limiting dilution.
The valuation question is the other side of the tension. Allegro carries an enterprise value of $7.8B against that $890.1M of revenue, an EV/sales of 8.8x, which the filings note is a 118.7% premium to peers. The company’s own mechanical scenarios (not forecasts) illustrate how sensitive outcomes are to the multiple the market assigns and to future revenue paths: the firm’s bull case uses an +8.5% revenue CAGR and an 8.6x exit multiple, the base case uses -2.9% CAGR with the same multiple, and the bear case pairs -4.4% CAGR with a 4.1x exit multiple.
In short, the filings show a demand rebound in data-center and sensor markets alongside increased reinvestment. Profitability remains fragile and the stock trades at a significant premium; future returns will be sensitive to margin expansion and the multiple the market assigns.
Revenue rose 22.8% to $890.1M; operating margin 2.1%; net margin -1.7%; EV/sales 8.8x (Allegro filings).