$Allegro Microsystems (ALGM.US)$In the March 2022 analysis, ...

Listed in 2020, mainly engaged in magnetic sensors and power integrated circuit business with a global market, current price is 30.68.

After listing, revenue shrank for two years and then grew for two years, with an average growth rate of 7.7%. In 2023, it grew by 26.7%. Operating profit also shrank for two years and then grew for two years, with an average growth rate of 40%. In 2023, it grew by 48.9%. The average growth rate of net income is 50%, with a 56.8% growth in 2023. Interest expenses in 2023 can be ignored. The gross margin has increased from 40.2% to 56.1% in the past four years, and the return on equity reached 22% in 2023.

Revenue growth in the first three quarters of 2024 increased by 14.9%, operating profit increased by 28.6%, and net income increased by 27.5%.

Since going public, the asset-liability ratio has decreased from 22.5% to 18.2%, surged to 27.5% in 2024Q3, mainly due to a significant acquisition. The proportion and growth rate of accounts receivable and inventory are normal.

Goodwill and other intangible assets surged from 0.08 billion to 0.51 billion in 2024Q3, accounting for 45% of the 1.135 billion net assets. Long-term borrowings surged from 0.025 billion to 0.25 billion, accounting for 22% of net assets. Strangely, accounts receivable and inventory did not show abnormal growth.

The income statement shows that the main operating costs in 2024Q3 increased significantly, gross margin decreased from 57.9% to 52.5%, operating expenses also increased significantly, causing operating profit to shrink by 44.1%. In addition, interest expenses also increased, resulting in a 48.3% decrease in net income.

Currently, cash is 0.214 billion, with a current ratio of 4.6 and a quick ratio of 2.8.

Since going public, operating cash flow has been significantly higher than investing cash flow. However, the acquisition in 2024Q3 has eroded shareholder's equity.

Currently, the P/E ratio is 31.6 and the P/E ratio TTM is 26.9. Considering the recent completion of a significant acquisition, the first quarter profit situation after the acquisition has deteriorated significantly. The long-term impact is still uncertain, so a wait-and-see approach is advised for now.