Core Insights - Allot Ltd. (ALLT) shares have increased by 20.6% over the past six months, outperforming the Zacks Internet-Software industry's decline of 7.5% and surpassing peers like Cisco Systems, F5, and Palo Alto Networks [1][9] - The strong performance is attributed to the rapid growth of Allot's Cybersecurity-as-a-Service (SECaaS) business, which is becoming a significant revenue driver [5][8] Financial Performance - In Q3 2025, Allot reported net sales of $26.4 million, a 14% year-over-year increase, exceeding the Zacks Consensus Estimate of $26 million [6] - Non-GAAP earnings per share (EPS) rose to 10 cents, compared to 3 cents in the same quarter last year, beating the consensus estimate by 150% [6] Revenue Guidance - Allot has raised its 2025 revenue guidance to a range of $100-$103 million, up from the previous estimate of $98-$102 million [7] - The company also increased its SECaaS annual recurring revenue (ARR) growth forecast to over 60% year-over-year, up from the prior guidance of 55-60% [7] SECaaS Business Growth - SECaaS ARR grew approximately 60% year-over-year in Q3 2025, driven by increased adoption from telecom partners and more end users subscribing to security services [8][10] - SECaaS accounted for around 28% of Allot's total revenues in Q3, with expectations to rise to nearly 30% if current trends persist [10] Market Position and Valuation - Allot's stock trades at a lower price-to-sales (P/S) ratio of 4.54X compared to the industry average of 4.71X, making it appealing for long-term investors [9][17] - Compared to peers, Allot's P/S multiple is lower than Cisco Systems (4.74X), F5 (4.93X), and Palo Alto Networks (11.82X), enhancing its attractiveness [17] Investment Recommendation - The strong growth in SECaaS, rising recurring income, and reasonable valuation position Allot as an attractive buy for investors seeking exposure to cybersecurity growth [18]

Core Viewpoint - Cantor Fitzgerald initiated coverage of Allot Ltd. (ALLT) with an Overweight rating and a price target of $15, highlighting the company's transition to a security-first consumer company with Security as a Service (SECaaS) as the main growth driver [1] Group 1: Company Transition and Growth - Allot is moving from being a mature network intelligence vendor to focusing on security services, indicating a strategic shift in its business model [1] - The primary growth driver for Allot is identified as SECaaS, which is expected to enhance the company's fundamentals and recurring revenue [1] Group 2: Market Position and Valuation - Despite the strong momentum and carrier-led wins, Allot's shares are trading at a significant discount compared to its peers, suggesting potential for growth and a re-rating of its market multiple [1] - The analyst notes that the combination of improving fundamentals and rising recurring revenue positions Allot for renewed growth [1]

Core Viewpoint - Allot Ltd. partners with Compax Venture to launch the first MVNO offering advanced cybersecurity services through Allot NetworkSecure and OffNetSecure, enhancing the value proposition for brand communities and their subscribers [1][3]. Group 1: Partnership and Services - Compax Venture, part of the Compax group, will implement MVNO services that include Allot's cybersecurity solutions, providing comprehensive protection for subscribers [2][3]. - The partnership aims to increase the value proposition for brand communities by integrating advanced cybersecurity services, ensuring a secure digital experience for members [3]. Group 2: Cybersecurity Solutions - Allot's NetworkSecure offers a clientless, zero-touch cybersecurity service that protects against threats such as malware, viruses, phishing, and ransomware, while also providing content filtering [3]. - OffNetSecure extends cybersecurity protection to subscribers when they are not connected to the provider's network, allowing service providers to maintain communication with subscribers in previously unmonitored areas [4]. Group 3: Market Impact - The integration of Allot's network-based security is expected to create a sustainable recurring revenue stream for Compax Venture, driving growth and enhancing customer loyalty [3]. - Allot's solutions are already deployed by over 500 service providers and 1000 enterprises globally, indicating a strong market presence and demand for their cybersecurity services [5].

Core Viewpoint - Allot Communications is transitioning from a network-intelligence provider to a security-focused consumer company, with security-as-a-service (SECaaS) as the main growth driver [1] Group 1: Financial Performance - SECaaS accounted for 28% of Allot's revenue, with annual recurring revenue increasing by 60% year over year in Q3 2025 [2] - Cantor Fitzgerald expects SECaaS to exceed 60% of total revenue over time, driven by carrier-led distribution and rising demand for security offerings [2] Group 2: Strategic Developments - Recent contract wins, including partnerships with Verizon Business and a large Tier-1 EMEA SG-Tera III deployment, provide multi-year visibility and potential upside to forecasts [3] - Allot's current trading valuation is approximately 3.8x estimated FY26 EV/sales, significantly lower than peers at around 7.4x [3] Group 3: Growth Potential - Expanding recurring revenue, high incremental margins at scale, and multiple growth catalysts support the potential for renewed growth and a valuation re-rating [3]

Core Insights - Allot Ltd. (ALLT) is experiencing significant growth in its Cybersecurity-as-a-Service (SECaaS) business, which is becoming the primary growth driver for the company, with an annual recurring revenue (ARR) increase of approximately 60% year over year in Q3 2025 [1][10] Group 1: SECaaS Growth and Revenue - SECaaS accounted for around 28% of Allot's total revenues in Q3 2025, with expectations to rise to 30% if current trends persist, indicating a positive outlook for the company's future [2] - Recurring revenues represented 63% of total revenues in Q3 2025, up from 58% a year ago, reflecting an improvement in revenue quality [2] - Key drivers of SECaaS growth include the addition of new subscribers from large Tier-1 telecom customers and upselling additional services to existing customers, supported by new offerings like OffNetSecure [3][10] Group 2: Future Projections - If telecom partners continue to scale SECaaS services and user adoption remains stable, the momentum could sustain Allot's ARR growth in the upcoming quarters, with revenue growth estimates of approximately 10.3% for 2025 and 13.3% for 2026 [4] - The Zacks Consensus Estimate for Allot's full-year 2026 earnings suggests a year-over-year increase of 15.9%, with recent upward revisions in estimates [15] Group 3: Competitive Landscape - Allot faces competition from Cisco Systems and F5 in network traffic management and security, with Cisco leveraging its extensive networking and security portfolio [5] - Cisco's recent collaboration with NVIDIA aims to develop an AI-native wireless network stack for future 6G networks, enhancing telecom operators' capabilities [6] - F5 competes through its application delivery and security solutions, offering products designed for efficient network traffic management [7] Group 4: Valuation and Price Performance - Allot's shares have declined by 4.2% over the past three months, contrasting with an 11.3% decline in the Zacks Internet - Software industry [8] - The company trades at a forward price-to-sales ratio of 4.05, which is lower than the industry's average of 4.7 [12]

Core Viewpoint - Allot Ltd. is actively engaging with investors at the Needham Growth Conference, highlighting its innovative Security-as-a-Service and network intelligence solutions for communications service providers and enterprises [1][2]. Company Overview - Allot Ltd. is a leading provider of converged cybersecurity solutions and network intelligence offerings, serving over 500 mobile, fixed, and cloud service providers, as well as more than 1000 enterprises globally [3]. - The company's solutions enhance value for customers through network-native cybersecurity services, application analytics, and traffic control, with millions of subscribers utilizing its security-as-a-service solution [3]. Investor Engagement - Allot's CEO, Eyal Harari, will present live at the Needham Growth Conference on January 14, 2026, at 11:00 a.m. ET, with a webcast available for viewing [2]. - Management will also be available for one-on-one meetings with institutional investors during the conference [2].

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Group 1: Company Performance - Oceaneering International, Inc. (OII) has seen a 11.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Topgolf Callaway Brands Corp. (MODG) has experienced a significant 59% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - OppFi Inc. (OPFI) has recorded a 10.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Vista Energy, S.A.B. de C.V. (VIST) has seen a substantial 48.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Core Viewpoint - Allot Communications (ALLT) shows potential for significant upside, with a mean price target of $13.5 indicating a 55% increase from its current price of $8.71 [1] Price Targets and Analyst Estimates - The mean estimate includes three short-term price targets with a standard deviation of $1.32, suggesting variability in analyst predictions. The lowest estimate is $12.50 (43.5% increase), while the highest is $15.00 (72.2% increase) [2] - A low standard deviation among price targets indicates strong agreement among analysts regarding the stock's price direction, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about ALLT's earnings prospects, with a positive trend in earnings estimate revisions. This trend has historically correlated with near-term stock price movements [11] - Over the last 30 days, two earnings estimates have been revised upward, leading to a 140% increase in the Zacks Consensus Estimate for the current year [12] - ALLT holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13] Caution on Price Targets - While consensus price targets are often sought after, they can mislead investors. Analysts may set overly optimistic targets due to business incentives, which can inflate expectations [3][8] - Investors should approach price targets with skepticism and not rely solely on them for investment decisions, as they may not accurately reflect future stock performance [10]

Company Overview - Riverwater Partners, an investment management company, released its "Micro Opportunities Strategy" Q3 2025 investor letter, reporting solid absolute returns but lagging behind the benchmark due to not keeping pace with the strong market rally [1] - The strategy focuses on quality companies in a volatile environment [1] Stock Performance - Allot Ltd. (NASDAQ:ALLT) was highlighted in the investor letter, showing a one-month return of 4.45% and a significant 88.19% gain over the last 52 weeks [2] - As of December 16, 2025, Allot Ltd. closed at $8.92 per share, with a market capitalization of $431.957 million [2] Company Details - Allot Ltd. was incorporated in Israel in 1996 and has been public on Nasdaq since 2006, with a dual listing in Tel-Aviv since 2010 [3] - The company offers network security as a service (SECaaS-Allot Secure 360) and network intelligence solutions (AllotSmart) to communications service providers (CSPs) and enterprises globally [3] - Allot's multi-service platforms are utilized by over 500 mobile, fixed, and cloud service providers, as well as over 1000 enterprises [3] - The company's network-native security-as-a-service solution is used by millions of subscribers worldwide, serving over one billion service providers and enterprise network users across 100 countries, with 25% of Fortune 500 companies as customers [3]

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