Allot Communications (ALLT) Stock Forecast & Price Target

Allot Ltd reported a significant increase in Total Revenue for 2QCY25, climbing 8.5% year-over-year to $24.1 million, driven by a remarkable 73% year-over-year growth in SECaaS Revenue, which reached $6.4 million. The company's Annual Recurring Revenue (ARR) from SECaaS experienced a 72.6% increase year-over-year, totaling $25.2 million in 2QCY25, with expectations for continued growth of 55%-60% in CY25. Additionally, Allot raised its revenue guidance for the full year to a range of $100 million to $103 million, reflecting strong performance and positive momentum in its service offerings.

Allot Ltd has experienced a significant decline in Product Revenue, with an 18.7% year-over-year drop to $7.6 million in the second quarter of CY25, highlighting persistent challenges in expanding its customer base and securing large deals. The company's struggle to engage with existing communications service providers (CSPs) amidst tightening capital expenditure budgets further exacerbates the adverse revenue trajectory, particularly as anticipated SECaaS deal signings are expected to decline. Moreover, the potential for underwhelming quarterly results or guidance, coupled with a weaker economic backdrop impacting IT budgets, raises concerns about the firm's ability to maintain market competitiveness and financial health.