Why Allot Shares Are a Lot Lower Today

Why Allot Shares Are a Lot Lower Today

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 have recovered somewhat from an opening plunge that sent their value 11% lower, and currently sit on a 5% loss as of this writing. Investors reversed yesterday's big gain after Allot reported underwhelming quarterly results, which were blamed on a delayed $5 million order fulfillment.

So what: Allot's second-quarter report showed adjusted revenue of $21.5 million, with an adjusted net loss of $0.03 per share. Both figures compare quite unfavorably to Wall Street's consensus figures, which had set the bar at $26.3 million in revenue and $0.06 in earnings per share. That delayed $5 million order will be recorded in the second half of the year, but as analyst Dov Rozenberg noted when speaking to Bloomberg about the miss, "The company's earnings are highly dependent on timely realization of orders, so it will take time for the company to win back investor confidence."

Now what: Despite the drop, investors seem to be coming to terms with Allot's chunky financial situation. Several analysts reiterated their optimism regarding Allot's shares yesterday before the earnings report came out, and have yet to walk back those projections today, as most accept the likelihood of today's weakness giving way to next quarter's potential outperformance. Allot's revenue has been increasing at a relatively steady rate, but its earnings have been zig-zagging up and down for years. It's going to take a bit more consistency on the bottom line before I'd get comfortable with this stock.

Want more news and updates? Add Allot Communications to your watchlist now.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why Allot Shares Are a Lot Lower Today originally appeared on Fool.com.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Originally published