Chip designer Allegro MicroSystems (NASDAQ:ALGM) will be announcing earnings results tomorrow before market open. Here's what investors should know.

Allegro MicroSystems met analysts' revenue expectations last quarter, reporting revenues of $255 million, up 2.5% year on year. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.

Is Allegro MicroSystems a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Allegro MicroSystems's revenue to decline 12.8% year on year to $235 million, a reversal from the 34.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.21 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Allegro MicroSystems has only missed Wall Street's revenue estimates once over the last two years, exceeding top-line expectations by 2.2% on average.

Looking at Allegro MicroSystems's peers in the processors and graphics chips segment, some have already reported their Q1 results, giving us a hint as to what we can expect. AMD delivered year-on-year revenue growth of 2.2%, meeting analysts' expectations, and Lattice Semiconductor reported a revenue decline of 23.6%, in line with consensus estimates. AMD traded down 9% following the results while Lattice Semiconductor was also down 10.8%.

Read our full analysis of AMD's results here and Lattice Semiconductor's results here.

Investors in the processors and graphics chips segment have had steady hands going into earnings, with share prices flat over the last month. Allegro MicroSystems is up 8.6% during the same time and is heading into earnings with an average analyst price target of $38.4 (compared to the current share price of $30.36).

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