Why Allot Communications' Shares Dropped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Allot Communications fell 12% today after the stock was downgraded by an analyst.
So what: Wunderlich's analysts were the culprits today, downgrading the stock to a hold rating from a buy rating. The firm cut its price target to $21 from $27, citing a lull in expected growth in the middle of next year.
Now what: The market often reacts in a knee-jerk fashion to downgrades like this, so that's why the stock is down so much today. The $21 price target was probably alarming since it's close to the price shares closed at yesterday. This shouldn't change your thesis completely, but keep the analyst's concerns in mind as a point to look for in coming quarters.
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The article Why Allot Communications' Shares Dropped originally appeared on Fool.com.Fool contributor Travis Hoium has no positions in the stocks mentioned above. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.