Allegro Earnings: Solid Holiday Results and Strategic Market Focus Bolster Appeal

We intend to drop coverage of wide-moat Allegro around March 21, 2025. In the fourth quarter, Allegro reported PLN 3.15 billion in revenue (outpacing our PLN 3.06 billion preprint expectation) and PLN 758 million in operating profit (just below our PLN 763 million profit forecast). We posit that solid holiday results, coupled with an upbeat revenue outlook, the inception of a share repurchase program, and a prudent pause on further international expansion, likely drove a midteens rise in share price after the report. However, we balance stronger revenue growth and the time value benefit with higher near-term expenses for the firm’s domestic segments and softer international results, resulting in no change to our PLN 42 per share intrinsic valuation. We still view shares as undervalued.