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While Allot Ltd. (NASDAQ:ALLT) might not have the largest market cap around , it saw a significant share price rise of 113% in the past couple of months on the NASDAQGS. The recent share price gains has brought the company back closer to its yearly peak. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today we will analyse the most recent data on Allot’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Allot
What's The Opportunity In Allot?
Good news, investors! Allot is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is $7.81, but it is currently trading at US$5.95 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Allot’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Allot?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 89% over the next couple of years, the future seems bright for Allot. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since ALLT is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ALLT for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ALLT. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.