A10 Networks (ATEN) vs. Allot Communications (ALLT) Financial Analysis

A10 Networks (NYSE: ATEN) and Allot Communications (NASDAQ:ALLT) are both small-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares A10 Networks and Allot Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A10 Networks -6.94% -17.63% -7.12%
Allot Communications -19.56% -7.22% -5.62%

Institutional and Insider Ownership

62.6% of A10 Networks shares are owned by institutional investors. Comparatively, 54.6% of Allot Communications shares are owned by institutional investors. 31.6% of A10 Networks shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for A10 Networks and Allot Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A10 Networks 0 2 1 0 2.33
Allot Communications 0 1 1 0 2.50

A10 Networks currently has a consensus price target of $7.75, suggesting a potential upside of 25.20%. Given A10 Networks’ higher possible upside, equities analysts plainly believe A10 Networks is more favorable than Allot Communications.

Earnings and Valuation

This table compares A10 Networks and Allot Communications’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A10 Networks $230.00 million 1.90 -$20.94 million N/A N/A
Allot Communications $81.99 million 2.15 -$18.07 million ($0.35) -15.00

Allot Communications has lower revenue, but higher earnings than A10 Networks.

Risk and Volatility

A10 Networks has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, Allot Communications has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Summary

A10 Networks beats Allot Communications on 6 of the 11 factors compared between the two stocks.

About A10 Networks

A10 Networks, Inc. provides software and hardware solutions in the United States, Japan, and internationally. The company's products are built on advanced core operating system platform. It offers application delivery controllers that provide advanced server load balancing; lightning application delivery service, a cloud-native software-as-a-service platform designed to boost the delivery and security of applications and micro services; and carrier grade networking address translation product that offer network address and protocol translation services for service provider networks. The company also provides threat protection systems for the protection of networks and server resources against massive distributed denial of service attacks; secure sockets layer insight that decrypts secure sockets layer-encrypted traffic and forwards it to a third-party security device, such as a firewall, for deep packet inspection; and convergent firewall, which consolidates multiple critical security capabilities in one package by consolidating multiple security and networking functions in a single appliance. Its solutions enable cloud providers, Web-scale companies, service providers, government organizations, and enterprises to secure and optimize the performance of their data center and cloud applications; and secure their users, applications, and infrastructure from Internet, Web, and network threats. The company delivers its solutions on optimized hardware appliances, bare metal software, virtual appliances, and cloud-native software. It serves telecommunications, technology, industrial, retail, financial, gaming, and education industries. The company markets its products through sales organizations, as well as distribution channel partners, including distributors, value added resellers, and system integrators. A10 Networks, Inc. was incorporated in 2004 and is headquartered in San Jose, California.

About Allot Communications

Allot Communications Ltd. provides network intelligence and security solutions to protect and personalize the digital experience worldwide. The company offers various platforms, including Allot Service Gateway 9500, Allot Service Gateway Tera, and Allot NetEnforcer for in-line deployment in traditional and virtualized network access infrastructure. It also provides subscriber management platforms, such as Allot TierManager, Allot QuotaManager, Allot ChargeSmart, and Allot Smart Engage Onboarding that drive centralized creation, provisioning, and pricing of subscriber services; and analytics solutions comprising Allot ClearSee Analytics and Allot ClearSee Data Source that analyze traffic data. In addition, the company offers security solutions comprising Allot WebSafe Personal, Allot WebSafe Business, Allot Service Protector, Allot Content Protector, Allot SpamOut Protector, and Allot Unified Security, as well as Security as a Service solutions for protecting network service integrity and brand reputation. Further, it offers centralized management solutions, such as NetXplorer Analytics and Reporting, NetXplorer Data Collector, NetAccounting Server, and NetPolicy Provisioner for providing a central access point for network-wide monitoring, reporting, analytics, troubleshooting, accounting, and quality of service policy provisioning. Allot Communications Ltd. markets its products through direct sales, distributors, resellers, original equipment manufacturers, and system integrators to carriers, mobile and fixed service providers, cable operators, private networks, data centers, governments, and enterprises, as well as wireless, wireline, and satellite Internet service providers. The company was formerly known as Ariadne Ltd. and changed its name to Allot Communications Ltd. in September 1997. Allot Communications Ltd. was founded in 1996 and is based in Hod-Hasharon, Israel.

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