Financial Analysis: ams-OSRAM (OTCMKTS:AMSSY) and Allegro MicroSystems (NASDAQ:ALGM)

Allegro MicroSystems (NASDAQ:ALGM) and ams-OSRAM (OTCMKTS:AMSSY) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Profitability

This table compares Allegro MicroSystems and ams-OSRAM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allegro MicroSystems	-3.60%	2.90%	1.93%
ams-OSRAM	-4.86%	2.61%	0.44%

Volatility and Risk

Allegro MicroSystems has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500. Comparatively, ams-OSRAM has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Valuation & Earnings

This table compares Allegro MicroSystems and ams-OSRAM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allegro MicroSystems	$725.01 million	7.99	-$73.01 million	($0.16)	-195.56
ams-OSRAM	$3.71 billion	0.28	-$850.53 million	($0.90)	-5.73

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

Institutional & Insider Ownership

56.5% of Allegro MicroSystems shares are owned by institutional investors. 0.4% of Allegro MicroSystems shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Allegro MicroSystems and ams-OSRAM, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allegro MicroSystems	1	2	9	0	2.67
ams-OSRAM	1	1	0	0	1.50

Allegro MicroSystems presently has a consensus price target of $38.78, suggesting a potential upside of 23.93%. Given Allegro MicroSystems’ stronger consensus rating and higher possible upside, equities analysts plainly believe Allegro MicroSystems is more favorable than ams-OSRAM.

Summary

Allegro MicroSystems beats ams-OSRAM on 12 of the 14 factors compared between the two stocks.

About Allegro MicroSystems

Allegro MicroSystems, Inc., together with its subsidiaries, 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; and power ICs comprising motor driver ICs, regulator and LED driver ICs, and isolated gate drivers. The company sells its products to original equipment manufacturers and distributors 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 ams-OSRAM

ams-OSRAM AG designs, manufactures, and sells LED and optical sensor solutions in Europe, the Middle East, Africa, the Americas, and Asia/Pacific. The company operates in Semiconductors and Lamps & Systems segments. The Semiconductors segment offers semiconductor-based products and solutions, such as high-performance LEDs, lasers, and optical sensors for automotive, consumer, and industrial and medical technology end markets. The Lamps & Systems segment provides lamps and lighting systems for the automotive, industrial, and medical end markets. The company was formerly known as ams AG and changed its name to ams-OSRAM AG in January 2022. ams-OSRAM AG is headquartered in Premstätten, Austria.