Allegro MicroSystems (NASDAQ:ALGM) vs. Synaptics (NASDAQ:SYNA) Financial Survey

Allegro MicroSystems (NASDAQ:ALGMGet Rating) and Synaptics (NASDAQ:SYNAGet Rating) are both mid-cap computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, risk and dividends.

Risk & Volatility

Allegro MicroSystems has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, Synaptics has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Profitability

This table compares Allegro MicroSystems and Synaptics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allegro MicroSystems 14.87% 16.87% 13.91%
Synaptics 15.53% 39.05% 17.17%

Insider & Institutional Ownership

46.9% of Allegro MicroSystems shares are held by institutional investors. Comparatively, 90.4% of Synaptics shares are held by institutional investors. 13.6% of Allegro MicroSystems shares are held by insiders. Comparatively, 0.8% of Synaptics shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Allegro MicroSystems and Synaptics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allegro MicroSystems 0 0 6 0 3.00
Synaptics 0 3 6 0 2.67

Allegro MicroSystems presently has a consensus price target of $31.80, indicating a potential downside of 5.75%. Synaptics has a consensus price target of $135.00, indicating a potential upside of 19.05%. Given Synaptics’ higher probable upside, analysts clearly believe Synaptics is more favorable than Allegro MicroSystems.

Valuation & Earnings

This table compares Allegro MicroSystems and Synaptics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Allegro MicroSystems $768.67 million 8.40 $119.41 million $0.61 55.31
Synaptics $1.74 billion 2.60 $257.50 million $6.93 16.36

Synaptics has higher revenue and earnings than Allegro MicroSystems. Synaptics is trading at a lower price-to-earnings ratio than Allegro MicroSystems, indicating that it is currently the more affordable of the two stocks.

Summary

Synaptics beats Allegro MicroSystems on 8 of the 13 factors compared between the two stocks.

About Allegro MicroSystems

(Get Rating)

Allegro MicroSystems, Inc. designs, develops, manufactures, and markets sensor integrated circuits (ICs) and application-specific analog power ICs for motion control and energy-efficient systems. Its products include magnetic sensor ICs, such as position, speed, and current sensor ICs; power ICs comprising motor driver ICs, and regulator and LED driver ICs; and photonic and 3D sensing components, including photodiodes, eye-safe lasers, and readout ICs for LiDAR applications. The company sells its products to original equipment manufacturers and suppliers primarily in the automotive and industrial markets through its direct sales force, third party distributors, independent sales representatives, and consignment. It operates in the United States, rest of the Americas, Europe, Japan, Greater China, South Korea, and other Asian markets. The company was founded in 1990 and is headquartered in Manchester, New Hampshire. Allegro MicroSystems, Inc. is a subsidiary of Sanken Electric Co., Ltd.

About Synaptics

(Get Rating)

Synaptics Incorporated develops, markets, and sells semiconductor product solutions worldwide. The company offers AudioSmart for voice and audio processing; ConnectSmart for high-speed video/audio/data connectivity; DisplayLink for transmitting compressed video frames across low bandwidth connections; VideoSmart that enables set-top boxes or over-the-top, streaming devices, soundbars, surveillance cameras, and smart displays; and ImagingSmart solutions. It also provides Natural ID, a fingerprint ID product that is used in automobiles, notebook personal computers (PCs), PC peripherals, and other applications; TouchPad, a touch-sensitive pad that senses the position and movement of one or more fingers on its surface; SecurePad that integrates fingerprint sensor directly into the TouchPad area; ClickPad that offers a clickable mechanical design; and ForcePad. In addition, the company offers ClearPad, which enables users to interact directly with the display on mobile smartphones, tablets, and automobiles; ClearView products that provide advanced image processing and low power technology for displays on smartphones and tablets; and TouchView products, a touch controller and display driver integration product. Further, it provides TouchPad with a pointing stick in a single notebook computer enabling users to select their interface of choice; TouchStyk, a self-contained pointing stick module; ultra-low power edge artificial intelligence platform for battery powered wireless devices; wireless connectivity solutions comprising Wi-Fi, Bluetooth, global positioning system, global navigation satellite system, and ULE; and voice over IP and digital enhanced cordless telecommunications solutions. The company sells its products through direct sales, outside sales representatives, distributors, and resellers to mobile and PC OEMs; IoT OEMs; and automotive and consumer electronics manufacturers. The company was incorporated in 1986 and is headquartered in San Jose, California.

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