Israeli computer networks company Allot Communications (ALLT) showed some weakness in its second quarter earnings, and Zacks senior foreign technology analyst Robert Perri, CFA says he is concerned regarding the company's expected third quarter numbers:
'Allot Communications reported second quarter results that were below our revenue and earnings expectations. The company reported an operating loss for the second straight quarter on higher than expected operating costs due to higher Selling expenses.
'While the company saw solid growth in the Americas, it appears many companies may be holding back orders until its new 20 GB/second gateway launches in the fourth quarter. We expect the stock to continue to trade sideways until there is more good news in the testing of its newest Service gateway, and the market has little tolerance for risk.
'With $3.17 of cash per share on the books, we see little downside to the stock at its current price although we continue to rate shares of ALLT a Hold and we have lowered our target price to $5.90 or 3.5x our 2007 sales estimate as there is little tolerance for risk in the current market.'
Read the full analyst report on ALLT
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