The Short Answer
Allegro MicroSystems' business activity is qualitatively halal and its known asset-based ratios pass, but the overall classification is incomplete. The March 27, 2026 filing shows debt/assets of 20.29%, liquidity/assets of 11.92%, receivables plus cash/assets of 20.04% and interest income of 0.09% of revenue.
Current quantitative Sharia screen
Based on 10-K figures for the period ended 2026-03-27; calculated 2026-07-15.
287.276 / 1,416.175
168.753 / 1,416.175
283.736 / 1,416.175
0.776 / 890.096
- Financial
- Pass
- Overall
- Incomplete
Debt/assets is 20.29%, liquidity/assets is 11.92%, receivables-plus-cash/assets is 20.04% and interest income is 0.09%; known ratios pass, while activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known financial ratios pass; this is not an index-membership claim and activity remains incomplete.
- Financial
- Pass
- Overall
- Incomplete
Known debt, liquidity and income ratios pass; this is not an official classification.
- Financial
- Not calculated
- Overall
- Incomplete
A licensed historical market-cap series is not stored.
Business-activity disclosure
Allegro designs magnetic-sensing, motor-driver and power-management semiconductors for automotive and industrial systems. The semiconductor activity is generally permissible, while downstream customer and end-use revenue remains qualitative.
Limitation: The filing does not classify every automotive, industrial, defense-adjacent or energy end use by a universal Sharia category.
Purification
Allegro discloses interest income of $0.776 million, but ZakatInvest does not prescribe a scholar-approved purification percentage.
Inputs, assumptions and primary sources
- Amounts are USD millions from Allegro MicroSystems' March 27, 2026 Form 10-K.
- Current and long-term debt total $287.276 million; operating lease liabilities are excluded.
- Cash and cash equivalents are $168.753 million; the filing does not separately identify an interest-bearing securities balance beyond cash and money-market holdings.
- Trade accounts receivable of $93.248 million plus accounts receivable-other of $21.735 million are used; first-year revenue is $890.096 million.
- The filing discloses $0.776 million of interest income from cash and cash equivalents.
- Automotive, industrial and power semiconductors are generally permissible, but no universal prohibited-revenue numerator is disclosed.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Designing and selling sensor and power semiconductors is generally permissible at the activity level, with vehicle electrification and energy-efficiency uses. The known filing-based asset ratios pass, but the filing does not provide a universal prohibited-revenue numerator, so the overall classification remains incomplete.
Sharia Screening Methodology
Islamic scholars use several criteria to screen stocks:
- Business activity screen: Is the company's primary business halal?
- Debt ratio: Total debt / market cap must be under 33%
- Interest income: Interest income / total revenue must be under 5%
- Haram revenue: Revenue from haram sources must be under 5%
- Receivables ratio: Total receivables / total assets must be under 49–70% (varies by board)
Allegro's Business Activity
Allegro designs analog and mixed-signal semiconductors, including:
- Magnetic sensors: Position, speed, and current sensing for vehicles and industry
- Power management: Regulators and motor-driver chips for electrified systems
- ADAS and clean-energy: Components for driver assistance and energy equipment
Designing and selling these semiconductors is permissible at the activity level — supporting electrification, safety, and energy efficiency.
Concerns to Be Aware Of
1. Term-Debt Leverage
Allegro reports $287.276 million of debt against $1,416.175 million of assets (20.29%), below the examined asset-based debt limits. Term loans remain interest-bearing instruments, and a market-cap denominator is not calculated here.
2. Interest Income on Cash
Disclosed interest income is $0.776 million, or 0.09% of fiscal-year revenue. ZakatInvest does not prescribe a fixed purification percentage, and no universal prohibited-revenue numerator is disclosed.
3. Automotive Cyclicality
As an automotive-exposed semiconductor company, Allegro's revenue and margins can be cyclical and sensitive to vehicle-production swings. This is a business consideration rather than a Sharia screen concern.
Filing-Based Ratios (March 27, 2026)
These calculations use Allegro's fiscal-year 2026 Form 10-K and total-assets denominators:
- Debt / assets: 20.29% — passes the examined debt limits
- Cash / assets: 11.92% — passes the examined liquidity limits
- Receivables + cash / assets: 20.04% — passes the examined limit
- Interest income / revenue: 0.09%; no fixed purification percentage asserted
Methodology Interpretation
On the stored total-assets calculations, FTSE Yasaar, MSCI Islamic and Malaysia SAC financial ratios pass. The activity and prohibited-revenue classification remains incomplete; these are comparisons with published methodologies, not claims of index membership or an external agency verdict.
Bottom Line
Allegro MicroSystems (ALGM) has a generally permissible semiconductor business and known asset-based ratios that pass, but the overall classification is incomplete because no universal prohibited-revenue numerator is disclosed. Investors should consult a qualified scholar and review updated filings.
For Muslim investors seeking semiconductor exposure, ALGM sits alongside other halal-screened names like NVIDIA (NVDA) and AMD (AMD).
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