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Allot Communications wows Oppenheimer analysts with its positive Q2 results

The analysts were encouraged by the network security company's 'steady execution' and recent partnerships

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Allot teamed up with McAfee and Telefónica to protect the networks of smaller-scale businesses

Allot Communications Ltd (NASDAQ:ALLT) reported better-than-expected second-quarter results earlier this week and analysts took notice.

Oppenheimer analysts were encouraged by the network security company’s positive second quarter and its path to profitability.

The Israel-based tech company reported a net loss of US$0.04 per share on revenue of US$23mln, surpassing Wall Street estimates of a net loss of US$0.06 EPS on revenue of US$22.35mln.

Allot reiterated its full-year revenue guidance of US$91 to US$95mln.

The company forecasts double-digit 2019 revenue growth, expecting to reach the break-even point or profitability by the second half of 2019.

READ: Needham upgrades Allot Communications shares to Buy, sees profitability by 2019

“Allot continues to show steady execution building out its security business (sales and marketing efforts, pipeline build, product enhancements) and improving its execution in the visibility and control market. We’re positive on the execution to date, though still look for better visibility into the pace of delivering on the security pipeline (2019+),” wrote analyst George Iwanyc.

Allot is shifting its focus from deep packet inspection, a method of data management, to network security.

The plan is to offer security services to telecom companies that will then offer the services to their customers, thereby lifting the customers’ burden of personal responsibility for protecting their devices.

The analysts cited the company’s recent deals as a sign that carriers are open to their model.

READ: Allot Communications teams up with McAfee and Telefónica to secure networks for smaller businesses

Allot’s joined forces with computer-security giant McAfee Inc and Spanish telecom giant Telefónica SA (NYSE:TEF) to help protect the fixed and mobile networks of smaller-scale businesses. The coverage will include device security, extending to mobile and personal computers.

The analysts reiterated a Perform rating with a positive bias.

The company recently presented at Oppenheimer’s 21st Annual Technology, Internet and Communications Conference.

Shares of Allot added nearly 3% after Thursday’s closing bell in New York and were up slightly to US$6.30 Friday morning. 

Quick facts: Allot Ltd

Price: 10.63 USD

Market: NASDAQ
Market Cap: $368.52 m

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