Is Allegro MicroSystems (ALGM) the Best Lidar Stock to Buy According to Hedge Funds?

Allegro MicroSystems (ALGM) has been making waves in the lidar industry, and hedge funds seem to be taking notice. But is ALGM the best lidar stock to buy according to these savvy investors? Let's dive into the data and find out.



First, let's examine the recent changes in hedge fund holdings in ALGM. In the last quarter, hedge funds decreased their holdings in Allegro MicroSystems by 148.9K shares. This decrease suggests that some hedge funds are selling their positions in the company, which could be seen as a bearish signal. However, it's essential to consider other factors, such as the company's fundamentals and market trends, to form a comprehensive view of the investment landscape.



One factor that makes ALGM an attractive investment for hedge funds is its acquisition of Voxtel, Inc. and its product portfolio. Voxtel's expertise in advanced photonic and 3D imaging technology, including eye-safe LiDAR, complements Allegro's extensive portfolio optimized for high-growth ADAS applications in semi-autonomous and autonomous vehicles. This combination enables ALGM to offer a more comprehensive solution for automotive LiDAR systems, increasing its foothold in the car of the future.



The acquisition of Voxtel allows ALGM to enter the high-growth market of LiDAR technology, which is crucial for enabling fully autonomous driving and supporting adaptive cruise control, among other features. This expansion can drive significant revenue growth for the company. Additionally, Voxtel's devices based on InGaAs operate at wavelengths at which the human eye is less sensitive, enabling higher laser power levels for longer range object detection beyond 200 meters. This eye-safe capability is essential for broad adoption of LiDAR technology in vehicles.



Another factor that makes ALGM an attractive investment is its strong financial performance. ALGM's projected annual revenue for 2024 is 1,176MM, representing an increase of 38.37% from the previous year. The projected annual non-GAAP EPS is 1.46. These strong financial projections indicate the company's potential for long-term growth.

In conclusion, while the recent changes in hedge fund holdings in ALGM may suggest a neutral to bearish sentiment, the company's acquisition of Voxtel, Inc. and its product portfolio, as well as its strong financial performance, make it an attractive investment for hedge funds. ALGM's expansion into the high-growth lidar market, combined with its eye-safe capability and complementary technologies, positions the company to capitalize on the growing demand for LiDAR technology in the automotive industry and supports its long-term growth potential. However, it's crucial to consider other factors, such as market trends and analyst recommendations, to form a comprehensive view of the investment landscape.