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Allot Ltd. has seen its stock price surge nearly 300% in the past year, prompting investors to take a closer look at the company. Allot has pivoted towards a software-based approach, focusing on security and network management solutions. The company's financials are promising, with a growing revenue stream and increasing profitability. Allot's success is attributed to its innovative products and strong customer relationships, making it a promising investment opportunity.

Allot Ltd. (NASDAQ: ALLT) has experienced a remarkable stock price surge of nearly 300% in the past year, drawing significant attention from investors. The company's pivot towards a software-based approach, focusing on security and network management solutions, has been a key driver of its recent success.

Financial Performance

Allot's financials have shown notable improvements. Sales began to recover in mid-2024 and have since been on an upward trajectory. In the latest quarter, Q2 2025, sales grew by 9% year-over-year, with Security-as-a-Service (SECaaS) ARR showing a whopping 73% growth. This segment now contributes 27% to total revenue, with SECaaS ARR topping $25.2 million Allot: A Promising Company Based On Financials^[1].

While the company is not yet profitable, it has made significant strides. The latest quarter saw a non-GAAP profit of $1.2 million, compared to a loss of $1 million in the same period last year. Operating cash flow also improved, reaching $4.4 million this past quarter, up from $1.2 million last year Allot: A Promising Company Based On Financials^[1].

Efficiency and Profitability

The company's efficiency metrics, such as Return on Assets (ROA) and Return on Equity (ROE), are still negative but have shown substantial improvement. The company's Return on Total Capital (ROTC) is almost at 0%, a significant improvement from before, suggesting that profitability could turn positive in the next year or two Allot: A Promising Company Based On Financials^[1].

Financial Position

Allot's balance sheet is strong, with around $27 million in cash and equivalents, $11 million in short-term bank deposits, and $11 million in marketable securities, against no long-term debt. The company has eliminated $30 million of convertible debt through a follow-on public offering, leaving it with a debt-free balance sheet Allot: A Promising Company Based On Financials^[1].

Valuation

Based on a hypothetical valuation model, Allot is trading slightly under its fair value, leading to a hold rating. The company's gross margins have improved from around 52% in early 2023 to around 73% as of the latest quarter. Mature SaaS companies typically achieve gross margins of 70% to 80% and operating margins of 15%-25% Allot: A Promising Company Based On Financials^[1].

Implied Volatility

Options traders are pricing in a significant move for Allot shares, with the Oct. 17, 2025 $6.00 Put having high implied volatility. This suggests that investors expect a big move in the stock's price, either up or down, in the near future Implied Volatility Surging for Allot Stock Options^[2].

Conclusion

Allot Ltd. is a promising company with a strong focus on software-based security solutions. Its financials show significant improvements, and the company is well-positioned for future growth. However, given the uncertainties and the high implied volatility, investors should monitor the company closely before making a decision to invest.