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URL:  http://boards.fool.com/nathan-and-emmett-i-started-looking-into-this-29967108.aspx

Subject:  Re: Allot Communications (ALLT) Date:  4/10/2012  1:35 AM
Author:  buynholdisdead Number:  7892 of 7921

Nathan and Emmett,
I started looking into this also and I can see this really growing big. They are still small and after listening into their conference call I can see how the Tier 1 providers would like to use their technology. Now that the Tier 1 providers are getting away from ATM data networks and going to Ethernet I think this company has a chance to take this niche by storm. Here is something I wrote up after listening to the conference call for my own info.

I am also going to post this on the mdp board to get some input.

Allot Communications LTD (ALLT) April 5th, 2012
Allot Communications Ltd. (Allot) is a provider of Internet protocol (IP) service optimization solutions for mobile, digital subscriber line (DSL) and wireless broadband carriers, cable operator service providers and enterprises. The Company’s portfolio of hardware platforms and software applications utilizes deep packet inspection (DPI) technology to transform broadband pipes into smart networks that can manage data over mobile and wire line networks and deploy Internet services. Its scalable, carrier-grade solutions provide the visibility, security, application control and subscriber management that are important to managing Internet service delivery, guaranteeing quality of experience (QoE). IPO'd 2006

Reported earnings on Feb 07, 2012 (Q4, 2011)

Price: $24.31
Nasdaq 3,080.50
Dow 13,060.14
WTI Crude oil $103.31 Brent Crude Oil $123.43
Gold $1631.39
Silver $31.73
Copper $3.80
Cotton $0.8153
Today the price in afterhours was $83.70 and the PE ratio is 75.96 and PS ratio range is 8.80

**Trading range for the quarter of Jan 6 2012 low of $15.71 and a high on April 5th of $24.31.

TTM EPS $.32 PE range between Jan 6, 2012 and April 5th, 2012
PE 49.09 – 75.96

**Trading range between Dec 31 2008 – Dec 31 2009 $1.55 – 4.20 TTM -.35 PE Range NA

**Trading range between Dec 31 2009 – Dec 31 2010 $ 3.66 - $11.99 TTM-.25 PE Range NA

1Q: March 31st, 2011 highlights
Total revenues for the first quarter of 2011 reached $17.2 million, a 38% increase from the $12.5 million of revenues reported for the first quarter of 2010, and a 6% increase from the $16.2 million of revenues reported for the fourth quarter of 2010. On a GAAP basis, net profit for the first quarter of 2011 was $1.6 million, or $0.07 per basic share and $0.06 per diluted share. This compares with a net loss of $0.4 million, or $0.02 per share (basic and diluted), in the first quarter of 2010, and net income of $1.3 million, or $0.06 per basic share and $0.05 per diluted share, in the fourth quarter of 2010.

Key highlights:
- First quarter revenues reached $17.2 million, a 38% increase over the first quarter of 2010
- First quarter non-GAAP net income of $2.2 million; non-GAAP EPS grows to $0.08 from $0.07 in the fourth quarter of 2010
- Cash, cash equivalents, marketable securities and restricted cash totaled approximately $61.0 million; generated approximately $1.0 million in cash from operations during the quarter
- Added five new Tier 1 wireless service providers during the first quarter

2Q: June 30th, 2011
Total revenues for the second quarter of 2011 reached $18.5 million, a 35% increase from the $13.6 million of revenues reported for the second quarter of 2010, and an 8% increase from the $17.2 million of revenues reported for the first quarter of 2011. On a GAAP basis, net profit for the second quarter of 2011 was $1.6 million, or $0.07 per basic share and $0.06 per diluted share. This compares with a net loss of $7.4 million, or $0.33 per share (basic and diluted), in the second quarter of 2010, and a net profit of $1.6 million, or $0.07 per basic share and $0.06 per diluted share, in the first quarter of 2011.

Key highlights:
- Second quarter revenues reached $18.5 million, a 35% increase over the second quarter of 2010
- Second quarter non-GAAP net profit of $2.7 million; non-GAAP EPS grew to $0.10 from $0.08 in the first quarter of 2011
- Cash, cash equivalents, marketable securities and restricted cash totaled approximately $63.5 million; generated approximately $3 million in cash from operations during the quarter
- Added five new Tier 1 service providers during the second



3Q: Sept. 30th, 2011
Total revenues for the third quarter of 2011 reached $20.1 million, a 37% increase from the $14.7 million of revenues reported for the third quarter of 2010, and a 9% increase from the $18.5 million of revenues reported for the second quarter of 2011. On a GAAP basis, net profit for the third quarter of 2011 was $2.1 million, or $0.09 per basic share and $0.08 per diluted share. This compares with net income of $0.8 million, or $0.03 per share (basic and diluted), in the third quarter of 2010, and a net profit of $1.6 million, or $0.07 per basic share and $0.06 per diluted share, in the second quarter of 2011.

Key highlights:
- Third quarter revenues reached record $20.1 million, a 37% increase over the third quarter of 2010
- Third quarter non-GAAP net profit of $3.4 million; non-GAAP EPS grew to $0.13 from $0.10 in the second quarter of 2011; non-GAAP operating margin reaches 16%
- Cash, cash equivalents, marketable securities and restricted cash totaled approximately $66.7 million; generated approximately $3.4 million in cash from operations during the quarter
- Added 5 new service providers during the third quarter





4Q: Dec, 31st, 2011
Total revenues for the fourth quarter of 2011 reached $22 million, a 36% increase from the $16.2 million of revenues reported for the fourth quarter of 2010, and a 10% increase from the $20.1 million of revenues reported for the third quarter of 2011. On a GAAP basis, net profit for the fourth quarter of 2011 was $3.5 million, or $0.13 per basic share and $0.12 per diluted share. This compares with net profit of $1.3 million, or $0.06 per basic share and $0.05 per diluted share, in the fourth quarter of 2010, and net profit of $2.1 million, or $0.09 per basic share and $0.08 per diluted share, in the third quarter of 2011. For the full year 2011, revenues reached $77.8 million, representing a 36% increase over the $57 million of revenues in 2010. On a GAAP basis, net profit for the year 2011 was $8.8 million, or $0.35 per basic share and $0.33 per diluted share, as compared with a net loss of $5.8 million, or $0.25 per share (basic and diluted), in 2010.
The weighted average number of diluted shares increased in the fourth quarter of 2011 reflecting the issuance of new shares as part of the Company’s public offering which closed on November 15, 2011.

Key highlights:
- Fourth quarter revenues reached $22 million, a 36% increase over the fourth quarter of 2010
- Fourth quarter non-GAAP net income of $4.2 million; non-GAAP EPS grows to $0.14 from $0.13 in the third quarter of 2011, despite dilution effect due to public offering
- Cash, cash equivalents and marketable securities totaled $159.4 million; generated approximately $7.7 million in cash from operations during the quarter; $15 million for the year 2011
- Revenues for 2011 increase by 36% to $77.8 million; non-GAAP EPS reaches $0.46
Acquisitions
• In September 2002 Allot acquired NetReality, a provider of network application priority switches (NAPS), in order to enhance its quality of service (QoS) and bandwidth management solutions.[5]
• In January 2008 Allot Acquired Esphion, a New Zealand based developer of network protection solutions for carriers and internet service providers

Thoughts:
36% yoy 2011 over 2010. 10% over 3rd quarter of 2011.
Latest Earnings call: It costs the Providers (Tier1 and others) 5 times more if they install equipment over the hardware and software solutions of ALLT. ALLT provides a 30% more bandwidth savings allowing providers to hold off installing more equipment. Growing more into Mobile and Fixed line Tier1 providers. Allt has customers in Europe, Asia, South America and North America. They are now pushing hard into the United States. This is an Israeli company. They are positioning themselves for the future flood of data. They are the only provider at this time of a single platform of optimization and monitoring of Data Packets. They see the Tier 1 providers going to an intelligent base charging system instead of a flat rate and they expect their value added services to grow. These allow the provider to charge more for their services by allowing priority data services to their customers. Allt also allows deep packet analyzation which allows them to prioritize traffic. They use VPI to identify applications on peer to peer traffic. IE Video, voice, skype. This type of technology competes indirectly with the equipment vendors by allowing more bandwidth across existing equipment.

Possible problems in the future:
Allt is not concerned with their direct competitors at this time because this is a growing field with young upstart companies with lots of room to grow. Where they may run into problems in the future would be with the large vendors IE Cisco, Ciena, Infn, and all the existing players in these fields. They could push R&D to allow their equipment the same deep packet technology. But the problem with this is that they are already behind the curve (The top Vendors) It would make more sense for them to buy these small companies out. If Allt is allowed to grow they could end up being the big player in this market but they have to make sure they add enough value in order for the tier 1 providers to spend the money to put their box into the network.

Andy
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