Allot Plunges to 2011 Low as Earnings Trail EstimatesGabrielle Coppola
Allot Communications Ltd., the Israeli maker of technology used to track wireless traffic, sank to the lowest level since October 2011 after its second-quarter earnings trailed analysts’ estimates.
Shares of Allot tumbled 17 percent, the steepest drop since Jan. 3, 2013, to $10.60 in New York. Trading volume was more than 16 times the average of the past three months. It was the worst performer on the Bloomberg Israel-US Equity index, which slipped 0.5 percent.
Allot extended its slump this year to 30 percent after reporting second-quarter earnings of 6 cents per share, missing the 8-cent average estimate of six analysts surveyed by Bloomberg. Revenue rose 33 percent to $28.2 million, below the $28.6 million average estimate.
While revenue was “light,” traders are overreacting to the earnings report because orders remain strong, said Alex Henderson, an analyst with Needham & Co., who rates the stock a buy. “Their bookings were up again sequentially, and I think that’s probably the most important variable here,” he said by phone from New York.
Six analysts have buy recommendations on Allot, while two rate it hold and one advises clients to sell the shares, according to data compiled by Bloomberg.
The Hod Hasharon, Israel-based company’s shares trade at 20.9 times projected 12-month earnings. That compares with an average multiple of 23.1 among 50 global peers, data compiled by Bloomberg show.