Allot (ALLT) AI Stock Analysis

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Allot

(NASDAQ:ALLT)

54Neutral

Allot's overall stock score reflects its ongoing financial challenges and mixed technical indicators, despite the positive developments highlighted in the earnings call. The return to profitability and strategic partnerships are significant strengths, but the company's valuation and technical performance remain concerning.

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

Market Cap

$227.44M

Dividend YieldN/A

Average Volume (3M)481.87K

Price to Earnings (P/E)―

Beta (1Y)1.17

Revenue Growth-1.03%

EPS Growth90.81%

CountryUS

Employees523

SectorTechnology

Sector Strength44

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-0.15

Shares Outstanding39,692,814

10 Day Avg. Volume378,151

30 Day Avg. Volume481,865

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)2.60

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.00

Price Target Upside141.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

Allot Business Overview & Revenue Model

Company DescriptionAllot (ALLT) is a leading global provider of innovative network intelligence and security solutions for service providers and enterprises. The company's core products and services include network traffic management, network security, and deep packet inspection (DPI) technologies. Allot's solutions empower its customers to optimize network performance, enhance user experience, and secure networks against cyber threats.

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 facing challenges with declining revenues and persistent losses. Despite some improvements in cash flow and gross profit margins, the company struggles with operational efficiency and leverage. Continued focus on cost management and revenue growth is essential for financial stability.

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
209.00K	-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
89.84M	88.40M	110.98M	77.41M	71.45M
	Stockholders Equity
49.80M	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
0.00	0.00	39.66M	2.81M	1.83M

Allot Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.38

Price Trends

50DMA

6.15

Negative

100DMA

6.24

Negative

200DMA

4.70

Positive

Market Momentum

MACD

-0.15

Negative

RSI

45.34

Neutral

STOCH

72.69

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALLT, the sentiment is Negative. The current price of 5.38 is below the 20-day moving average (MA) of 5.64, below the 50-day MA of 6.15, and above the 200-day MA of 4.70, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 72.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPSC	75 Outperform	$4.83B	62.43	10.12%	―	18.78%	15.01%
ATEN	74 Outperform	$1.16B	23.65	22.81%	1.52%	3.97%	25.83%
RELY	69 Neutral	$3.83B	―	-6.19%	―	33.85%	70.39%
VRNT	67 Neutral	$970.60M	16.02	6.35%	―	-0.13%	263.78%
CFLT	66 Neutral	$7.06B	―	-38.95%	―	24.03%	27.45%
Sector *	58 Neutral	$9.82B	10.00	-6.63%	3.09%	7.49%	-11.58%
ALLT	54 Neutral	$227.44M	―	-11.79%	―	-1.03%	90.81%

* Technology Sector Average

Performance Comparison

ALLT

Allot

5.38

3.26

153.77%

SPSC

SPS Commerce

126.99

-43.61

-25.56%

VRNT

Verint Systems

15.62

-14.73

-48.53%

ATEN

A10 Networks

15.30

2.03

15.30%

CFLT

Confluent

20.40

-8.13

-28.50%

RELY

Remitly Global

19.10

0.26

1.38%

Allot Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -18.61% | Next Earnings Date: May 20, 2025

Earnings Call Sentiment Positive

Allot Ltd. has demonstrated a strong turnaround with notable revenue growth in its CCaaS segment, improved gross margins, and a return to profitability. Significant contracts with major telecom operators, such as Verizon, highlight strategic advancements. Despite a decline in product revenue and slightly lower overall revenue compared to the previous year, the company's positive trends in cash flow and profitability indicate a favorable outlook.

Highlights

Return to Revenue Growth

Allot Ltd. reported an increase in fourth quarter and full year 2024 revenues year over year, indicating a return to revenue growth.

Significant Growth in CCaaS

The CCaaS (Cybersecurity as a Service) revenues reached $16.5 million for the full year, up 56% over the previous year, with ARR at $18.2 million, up 43% year over year.

Improved Gross Margins

Gross margins increased significantly to around 70%, recovering from 57% in 2023.

Return to Profitability

Reported a non-GAAP net income of $5.6 million for the year versus a loss of $53 million last year.

Positive Cash Flow

Generated a positive cash flow of $4.8 million in 2024, marking the first time in several years.

Notable Contracts and Partnerships

Secured significant contracts with major telecom operators, including Verizon and Vodafone UK.

Lowlights

Decline in Product Revenue

Product revenue was down 55% year over year, reflecting fluctuations due to specific deal timing and seasonality.

Revenue Slightly Below Previous Year

Full year 2024 revenue was $92.2 million, just 1% below those of 2023.

Company Guidance

During the call, Allot Ltd. showcased significant financial improvements and growth metrics, marking a pivotal inflection point in its turnaround strategy. The company reported fourth quarter revenues of $24.9 million, a 2% year-over-year increase, while full-year 2024 revenues were $92.2 million, just 1% below the previous year. The company's CCaaS (Cybersecurity as a Service) revenue notably grew by 49% year-over-year, contributing $4.8 million in the quarter and comprising 19% of total revenue. The CCaaS annual recurring revenue (ARR) increased by 43% year-over-year to $18.2 million. Allot's gross margins rebounded to 69.7% in the quarter, a significant recovery from 51.7% the previous year, and achieved a full-year non-GAAP net income of $5.6 million, reversing a $53 million loss in 2023. Additionally, Allot reported a positive operating cash flow of $4.8 million for 2024, enhancing its year-end cash position to $59 million. The company's strategic focus on its security-first approach, underscored by new partnerships with major telecom operators like Verizon, positions it for continued growth and profitability in 2025 and beyond.

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.