Some Tech Stocks are a Dubious Choice. What about Allot?

Tech stocks are generally a good investment. They are growing fast and generate a good profit. While some of them are domineering the stock market, next to the giants are also smaller stocks, which are as good a catch for investors as formers.

Allot is one of such stocks. It’s a cloud computing company, which is focused on network intelligence and security solutions. The company’s fourth-quarter 2019 data showed good results, affirming that the stock is growing fast. Furthermore, the company offers various products, such as DOS protection, security as a service (SECaaS), traffic management, network intelligence, and so on.

Allots annual revenue was $110.1 million in 2019, showing a 15% increase. The stock’s revenue grew by 14% in the fourth quarter, reaching $30.6 million. Experts think that the company will gain 41% in 2020. According to the company’s estimates, it’s 2020 revenue will be in the range of $135 million to $140 million.

Alex Henderson, Needham’s analyst, thinks that this stock is a strong buy. He doubled the stock’s price target, at first increasing his target from $9.50 to $11.50. Henderson raised the target a second time to $15. That’s a 58% increase in his outlook for Allot stock. If the target is met, the shareholders will gain 26% over the year.

The stock nearly doubled during the past 18 months. As Henderson stated, Allot Communications should succeed, given its robust pipeline of leads, as well as the adoption intent of its customers regarding its Security subscription businesses. The company’s market cap is only $410.5 million presently, but it may change fast in the near future.   

Is Buying Tech Stocks Right Now a Good Decision?

While the tech stocks rallied in 2019 and most of them ended the year in the green, this year, the coronavirus outbreak changed the tables. Experts are predicting only a 3% to 5% gain for tech companies by the end of 2020.

Those tech stocks, which have more exposure to China, suffered the most. However, the current events don’t mean that investors must avoid tech stocks. Not all are affected by the virus negatively. Some of them are still a strong buy.