We feel now is a pretty good time to analyse Allot Ltd.'s (NASDAQ:ALLT) business as it appears the company may be on the cusp of a considerable accomplishment. Allot Ltd. engages in developing, selling, and marketing security solutions and network intelligence solutions for mobile, fixed, and cloud service providers, as well as enterprises worldwide. The US$284m market-cap company’s loss lessened since it announced a US$63m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$24m, as it approaches breakeven. Many investors are wondering about the rate at which Allot will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Allot

Allot is bordering on breakeven, according to some American Software analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$3.0m in 2027. The company is therefore projected to breakeven around 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 62%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Allot given that this is a high-level summary, but, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Allot is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Allot's case is 83%. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Allot which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Allot, take a look at Allot's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Valuation: What is Allot worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Allot is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Allot’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.