Allot (ALLT) AI Stock Analysis

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Allot

(NASDAQ:ALLT)

53Neutral

Allot's stock score reflects a company in recovery mode, with improving cash flows and gross margins counterbalanced by ongoing challenges in profitability and valuation. The technical indicators suggest caution, as the stock trades below key moving averages. Positive highlights from the recent earnings call, including strategic partnerships and a return to profitability, offer some optimism for future growth. However, sustained improvement in financial and operational metrics is crucial to enhance investor confidence.

Allot (ALLT) vs. S&P 500 (SPY)

Market Cap

$312.38M

Dividend YieldN/A

Average Volume (3M)334.87K

Price to Earnings (P/E)―

Beta (1Y)1.12

Revenue Growth-1.03%

EPS Growth90.81%

CountryUS

Employees523

SectorTechnology

Sector Strength77

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.02

Shares Outstanding39,692,814

10 Day Avg. Volume340,814

30 Day Avg. Volume334,868

Financial Highlights & Ratios

PEG Ratio-0.56

Price to Book (P/B)5.01

Price to Sales (P/S)0.00

P/FCF Ratio92.16

Enterprise Value/Market Cap0.90

Enterprise Value/Revenue0.76

Enterprise Value/Gross Profit4.43

Enterprise Value/Ebitda-2.95

Forecast

1Y Price Target

$13.00

Price Target Upside56.63% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Allot Business Overview & Revenue Model

Company DescriptionAllot Ltd. provides network intelligence and security solutions to protect and personalize the digital experience in Europe, Asia, Oceania, the Middle East, Africa, and the Americas. The company offers Allot Secure Management platform that includes Allot NetworkSecure, Allot HomeSecure, Allot DNSecure, EndPoint Secure, Allot BusinessSecure, Allot IoTSecure, and Allot Secure Cloud. It also provides Allot DDoS Secure/5G Protect, a solution that offers attack detection and mitigation services; integrated network intelligence solutions; and centralized management solutions, such as Allot NetXplorer for providing a central access point for network-wide monitoring, reporting, analytics, troubleshooting, accounting, and quality of service policy provisioning. The company markets its products through direct sales, distributors, resellers, original equipment manufacturers, and system integrators to carriers, mobile and fixed service providers, cable operators, satellite service providers, private networks, data centers, financial and educational institutions, and governments. Allot Ltd. was formerly known as Allot Communications Ltd. and changed its name to Allot Ltd. in October 2018. The company was incorporated in 1996 and is based in Hod Hasharon, Israel.

How the Company Makes MoneyAllot makes money primarily through the sale of its network intelligence and security solutions to telecommunications service providers and enterprises. The company's revenue model includes the sale of hardware, software licenses, and recurring revenue from maintenance and support contracts. Allot also generates revenue through its security-as-a-service offerings, which provide ongoing network protection and management. Key revenue streams include direct sales to telecom operators, ISPs, and large enterprises, as well as strategic partnerships and collaborations with technology vendors and service providers to integrate Allot's solutions into broader service offerings.

Allot Financial Statement Overview

Summary

Allot is experiencing challenges in achieving profitability with declining revenues and negative net profit margins. However, improvements in cash flow and gross profit margins offer some positive signals. The balance sheet shows manageable but increasing leverage, and the overall financial health requires a focus on cost management and revenue growth.

Income Statement

Neutral

Allot's revenue decreased by 1.03% from 2023 to 2024, and the company has been facing a declining trend since 2021. Gross Profit Margin improved to 69.1% in 2024 from 56.56% in 2023, yet the company remains unprofitable with a negative Net Profit Margin of -6.37% in 2024. The EBIT and EBITDA margins improved but are still negative, indicating operational challenges.

Balance Sheet

Neutral

The debt-to-equity ratio increased slightly to 0.93 in 2024 from 0.84 in 2023, showing a manageable but rising leverage level. The equity ratio decreased to 35.66% in 2024, indicating lower asset financing through equity. Return on Equity remained negative due to consistent net losses, which is concerning for shareholder returns.

Cash Flow

Neutral

Allot's cash flow improved in 2024, with a positive Operating Cash Flow of $4.83M compared to negative in 2023. Free Cash Flow also turned positive at $2.71M in 2024, reflecting better cash management. However, the Free Cash Flow to Net Income ratio remains weak due to continuing net losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
92.19M	93.15M	122.74M	145.60M	135.92M
	Gross Profit
63.69M	52.69M	82.91M	101.05M	95.84M
	EBIT
-6.01M	-64.94M	-32.27M	-13.53M	-9.03M
	EBITDA
2.12M	-55.13M	-22.75M	-7.95M	-2.86M
	Net Income Common Stockholders
-5.87M	-62.80M	-32.03M	-15.04M	-9.35M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
57.86M	53.05M	85.35M	83.97M	98.00M
	Total Assets
139.64M	138.16M	212.95M	203.41M	201.60M
	Total Debt
46.34M	41.93M	44.70M	8.25M	4.65M
	Net Debt
30.20M	27.74M	32.40M	-3.46M	-18.95M
	Total Liabilities
89.83M	88.40M	110.98M	77.41M	71.45M
	Stockholders Equity
49.81M	49.76M	101.97M	126.01M	130.15M
Cash Flow		Free Cash Flow
2.71M	-32.23M	-38.21M	-16.01M	-19.81M
	Operating Cash Flow
4.83M	-29.74M	-32.56M	-8.37M	-12.22M
	Investing Cash Flow
-2.88M	31.63M	-6.51M	-6.32M	17.06M
	Financing Cash Flow
1.00K	0.00	39.66M	2.81M	1.83M

Allot Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.30

Price Trends

50DMA

5.89

Positive

100DMA

6.52

Positive

200DMA

5.00

Positive

Market Momentum

MACD

0.49

Negative

RSI

73.54

Negative

STOCH

89.95

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLT, the sentiment is Positive. The current price of 8.3 is above the 20-day moving average (MA) of 6.25, above the 50-day MA of 5.89, and above the 200-day MA of 5.00, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 73.54 is Negative, neither overbought nor oversold. The STOCH value of 89.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALLT.

Allot Risk Analysis

Allot disclosed 44 risk factors in its most recent earnings report. Allot reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Allot Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPSC	73 Outperform	$5.80B	70.04	10.13%	―	19.46%	16.20%
VRNT	73 Outperform	$1.13B	19.02	6.35%	―	-0.13%	263.78%
ATEN	73 Outperform	$1.29B	26.91	24.36%	1.34%	4.90%	9.91%
RELY	66 Neutral	$4.99B	―	-0.71%	―	34.37%	95.80%
Sector *	60 Neutral	$11.60B	10.64	-6.04%	2.94%	7.87%	-11.74%
CFLT	58 Neutral	$7.60B	―	-34.18%	―	24.11%	21.87%
ALLT	53 Neutral	$312.38M	―	-7.51%	―	-1.03%	90.81%

* Technology Sector Average

Performance Comparison

ALLT

Allot

8.30

6.11

279.00%

SPSC

SPS Commerce

149.75

-46.30

-23.62%

VRNT

Verint Systems

18.54

-13.38

-41.92%

ATEN

A10 Networks

17.63

1.70

10.67%

CFLT

Confluent

23.50

-8.03

-25.47%

RELY

Remitly Global

23.13

8.93

62.89%

Allot Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 30.91%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call presents a positive outlook with strong revenue growth, expanded partnerships, and new product launches. However, there are some uncertainties regarding the exact growth of SECaaS ARR, dependent on service provider marketing efforts.

Q1-2025 Updates

Positive Updates

Revenue and SECaaS Growth

First quarter revenue increased by 6% year-over-year to $23.2 million. SECaaS contributed $5.1 million, up 49% year-over-year, comprising 22% of total revenue.

Partnership Expansion with Verizon

Allot expanded its partnership with Verizon Business, providing cybersecurity protection to over 30 million mobile subscribers. Verizon became the largest contributor to SECaaS revenues in Q1.

Profitability Achieved

Allot reported a non-GAAP net income of $0.8 million, compared to a loss in the same quarter last year, with a positive operating cash flow of $1.7 million.

New Product Launches

Launched the OffNetSecure solution at RSA in San Francisco, expanding cybersecurity protection to off-network customers. Received positive feedback and strong interest.

Partnership Expansion with Vodafone

Continued growth in SECaaS adoption with Vodafone and potential expansions into more regions.

Smart Product Pipeline Growth

Increased demand for smart products, with a strong pipeline including multi-million and eight-figure deals, driven by the new Tera III platform.

Negative Updates

Uncertainties in SECaaS ARR Growth

While the company expects SECaaS ARR to grow around 50% or more, there are uncertainties due to reliance on service providers' marketing efforts.

Dependency on Service Providers

Significant reliance on service providers like Verizon and Vodafone for SECaaS revenue growth, which may pose risks if marketing and adoption do not meet expectations.

Company Guidance

During Allot's first quarter 2025 results conference call, the company highlighted several key metrics showcasing its strong performance and strategic direction. Allot reported a 6% year-over-year revenue increase, reaching $23.2 million, with the Security as a Service (SECaaS) solution playing a pivotal role by contributing 22% or $5.1 million to the quarterly revenue, up 49% from the previous year. The SECaaS annual recurring revenue (ARR) stood at $21.2 million, marking a 55% year-over-year increase. The company achieved a non-GAAP gross margin of 70.4% and reported a non-GAAP net income of $0.8 million, contrasting with a loss in the same quarter last year. Additionally, Allot maintained a positive operating cash flow of $1.7 million, boosting its cash position to over $60 million by the end of the quarter. These results were attributed to the successful execution of Allot's security-first strategy, partnerships with major telcos like Verizon and Vodafone, and the launch of new products, such as OffNetSecure. Looking ahead, Allot projects a SECaaS revenue and ARR growth of around 50% or more for the full year 2025, emphasizing its optimism about future profitability and market opportunities.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.