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Allot (AG6) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Allot disclosed 44 risk factors in its most recent earnings report. Allot reported the most risks in the “Tech & Innovation” category.

Risk Overview Q4, 2019

Source: the company's latest filing for the period ended Dec 31, 2019, filed Mar 26, 2020

Risk Distribution
44Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

No filing history is available.

Risks removedRisks addedRisks changedAllot Risk Factors
Risk Changed (2)
  • Accounting & Financial Operations - Risk 1
    We have a history of losses and may not be able to achieve or maintain profitability in the future.

    We have a history of net losses in all fiscal years since our inception, other than in 2006 and 2011. In 2019 we had a net loss of $8.7 million. Compared to the previous year, in 2019 revenues increased by $14.3 million while the gross profit increased by $9.8 million. Operating expenses increased by $8.6 million, tax expenses increased by $0.8 million and financial income decreased by $0.2 million. In the future we intend to continue to invest in these areas that we believe will contribute to our future growth. We had a net loss of $10.4 million in 2018, resulting mainly from an increase in [operating expenses of $5.8 million and tax expenses of $0.9 million]. We had a net loss of $18.1 million in 2017, resulting mainly from a decrease in both products revenues and services revenues of $8.4 million, restructuring expenses of $2.4 million, changes in tax related items of $1.7 million and the impact of the weakening of the U.S. dollar mainly against the ILS and Euros. We can provide no assurance that we will be able to achieve or maintain profitability, and we may incur losses in the future if we do not generate sufficient revenues.

Read and Evaluate the RiskReserved for Ultimate MembersUpgrade
Tech & Innovation (6)
Legal & Regulatory (2)
Production (4)
Ability to Sell (6)
Macro & Political (2)

Risk Highlights Q4, 2019

Main Risk Category
Tech & Innovation
With 10 Risks
Number of Disclosed Risks
44
+21
From last report
S&P 500 Average: 32
Recent Changes
21Risks added
0Risks removed
2Risks changed
Since Dec 2019
Number of Risk Changed
2
+2
From last report
S&P 500 Average: 1

Risk Word Cloud

our revenues and business may be adversely affected due to decline in revenues and profits of communication service providers (csps).adversely affected due to declinecontinued salary increase of research and development manpower could adversely affect our ability to recruit suitable research and development employees and could have an adverse effect on our business and revenues.continued salary increase of researchcertain u.s. holders of our ordinary shares may suffer adverse tax consequences if we or any of our non-u.s. subsidiaries are characterized as a "controlled foreign corporation", or a cfc, under section 957(a) of the internal revenue code of 1986, as amended (the "code").holders of our ordinary shareswe currently depend on a single subcontractor to manufacture and provide hardware and warranty support for our service gateway tera platform. if this subcontractor experiences delays, disruptions, quality control problems or a loss in capacity, our operating results could be materially and adversely affected.our service gateway tera platformwe face risks related to health epidemics and other widespread outbreaks of contagious disease, including the recent coronavirus (covid-19) pandemic, which could significantly disrupt our operations and materially negatively impact our financial results.widespread outbreaks of contagious diseasedemand for our security products depends, in part, on continued evolution of on-line threats as well as on operators' interest in providing security services to their end customers.continued evolution of on-line threatsour revenues and business may be adversely affected due to decline in revenues and profits of communication service providers (csps).profits of communication service providersthe complexity and scope of the solutions and services we provide to larger service providers are increasing, and such larger projects entail greater operational risk and an increased chance of failure.provide to larger service providerswe use certain "open source" software tools that may be subject to intellectual property infringement claims, the assertion of which could impair our product development plans, interfere with our ability to support our clients or require us to pay licensing feesimpair our product development plansprovisions of israeli law and our articles of association may delay, prevent or make undesirable an acquisition of all or a significant portion of our shares or assets.significant portion of our shares

Risk Factors Full Breakdown - Total Risks 44

Innovation / R&D1 | 2.3%
  • Innovation / R&D - Risk 1Added
    Our revenues and business will be harmed if we do not keep pace with changes in broadband applications, network security threats and with advances in technology, or if we do not achieve widespread market acceptance, including through significant investments.

    We will need to invest heavily in the continued development of our technology in order to keep pace with rapid changes in applications, increased broadband network speeds, network security threats and with our competitors' efforts to advance their technology. Our ability to develop and deliver effective product offerings depends on many factors, including identifying our customers' needs, technical implementation of new services and integration of our products with our customers' existing network infrastructure. While we will continue to introduce innovative products, we cannot provide any assurance that any new products we introduce will achieve the same degree of success that we have with our existing products. Designers of broadband applications and distributors of various network security threats that our products identify, manage or mitigate are using increasingly sophisticated methods to avoid detection and management and/or mitigation by network operators. Even if our products successfully identify a particular application, it is sometimes necessary to distinguish between different types of traffic belonging to a single application. Accordingly, we face significant challenges in ensuring that we identify new applications and new versions of current applications as they are introduced, without impacting network performance, especially as networks become faster. This challenge is increased as we seek to expand sales of our products to new geographic territories because the applications vary from country to country and region to region. The network equipment market is characterized by rapid technological progress, frequent new product introductions, changes in customer requirements and evolving industry standards. To compete, we need to achieve widespread market acceptance. Alternative technologies could achieve widespread market acceptance and displace the technology on which we have based our product architecture. Our business and revenues will be adversely affected if we fail to develop enhancements to our products, in order to keep pace with changes in broadband applications, network security threats and advances in technology.  We can give no assurance that our technological approach will achieve broad market acceptance or that other technology or devices will not supersede our technology and products.

Trade Secrets3 | 6.8%
Technology6 | 13.6%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.