Allot (NASDAQ: ALLT shareholders suffer further losses as shares fall 15% this week, pushing year-on-year losses to 63%

Investing in stocks involves the risk that the price of the stock will fall. And there’s no doubt that Allot Ltd. (NASDAQ:ALLT) The stock has had a very bad year. Namely, the stock price fell by 63% during this period. Longer-term shareholders have not suffered as much, as the stock has fallen a comparatively less painful 11% in three years. The falls have accelerated recently, with the stock price falling 42% in the past three months. We note that the company released results fairly recently; and the market is hardly thrilled. You can view the latest figures in our corporate report.

Going by the past week, investor sentiment for Allot is not positive, so let’s see if there is a mismatch between the fundamentals and the stock price.

See our latest analysis for Allot

Allot has not been profitable for the last twelve months, we are unlikely to see a strong correlation between its share price and its earnings per share (EPS). Income is arguably our second best option. Generally speaking, companies without profits should increase their revenue every year, and at a good pace. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.

Over the last twelve months, Allot has increased its turnover by 7.1%. It’s not a very high growth rate since it’s not making a profit. It is likely that this moderate growth has contributed to the share price decline of 63% over the past year. We would like to see evidence that future revenue growth will be stronger before we get too interested. Of course, sometimes the market can be too impatient. Why not take a closer look at this one so you’re ready to pounce if growth picks up.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see exact values).

Take a closer look at Allot’s financial health with this free report on its balance sheet.

A different perspective

Allot investors had a difficult year, with a total loss of 63%, against a market gain of around 1.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the positive side, long-term shareholders have made money, gaining 8% per year over half a decade. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. It is always interesting to follow the evolution of the share price over the long term. But to better understand Allot, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 2 warning signs with Allot, and understanding them should be part of your investment process.

If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.