Allot (NASDAQ:ALLT shareholders incur further losses as stock declines 15% this week, taking one-year losses to 63%

Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Allot Ltd. (NASDAQ:ALLT) stock has had a really bad year. To wit the share price is down 63% in that time. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 11% in three years. The falls have accelerated recently, with the share price down 42% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

If the past week is anything to go by, investor sentiment for Allot isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Allot

Allot wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last twelve months, Allot increased its revenue by 7.1%. That's not a very high growth rate considering it doesn't make profits. It's likely this muted growth has contributed to the share price decline of 63% in the last year. We'd want to see evidence that future revenue growth will be stronger before getting too interested. Of course, the market can be too impatient at times. Why not take a closer look at this one so you're ready to pounce if growth does accelerate.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Allot's financial health with this free report on its balance sheet.

A Different Perspective

Investors in Allot had a tough year, with a total loss of 63%, against a market gain of about 1.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Allot better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Allot , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.