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If You Had Bought Allot (NASDAQ:ALLT) Shares Three Years Ago You'd Have Earned98% Returns

Simply Wall St
·3 min read

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By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. For example, Allot Ltd. (NASDAQ:ALLT) shareholders have seen the share price rise 98% over three years, well in excess of the market return (28%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 31%.

See our latest analysis for Allot

Given that Allot didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years Allot has grown its revenue at 12% annually. That's pretty nice growth. While the share price has done well, compounding at 25% yearly, over three years, that move doesn't seem over the top. Of course, valuation is quite sensitive to the rate of growth. Keep in mind that the strength of the balance sheet impacts the options open to the company.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So it makes a lot of sense to check out what analysts think Allot will earn in the future (free profit forecasts).

A Different Perspective

We're pleased to report that Allot shareholders have received a total shareholder return of 31% over one year. That's better than the annualised return of 14% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of Allot's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course Allot may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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