Here's Why Momentum in Allot Communications (ALLT) Should Keep going

Allot Communications (ALLT) has been identified as a potentially profitable investment for trend-following investors, exhibiting a 34.5% price increase over 12 weeks and a 32.5% increase over the past four weeks, trading at 80.1% of its 52-week high. The stock holds a Zacks Rank #1 (Strong Buy), placing it in the top 5% of stocks based on earnings estimate revisions, and an Average Broker Recommendation of #1 (Strong Buy), suggesting strong near-term price performance expectations.

Analysis

Allot Communications (ALLT) has demonstrated significant recent price strength, with its stock appreciating 34.5% over the past 12 weeks and 32.5% in the preceding four weeks, indicating a sustained upward trend. The stock is trading at 80.1% of its 52-week high-low range, which often signals potential for a technical breakout. This price momentum is underpinned by strong fundamental indicators: ALLT holds a Zacks Rank #1 (Strong Buy), positioning it in the top 5% of over 4,000 stocks ranked by Zacks based on positive trends in earnings estimate revisions and EPS surprises. Notably, Zacks Rank #1 stocks have historically generated an average annual return of +25% since 1988. Reinforcing this positive outlook, ALLT also has an Average Broker Recommendation of #1 (Strong Buy), signifying high optimism from the brokerage community regarding its near-term price performance. The convergence of robust price action and favorable fundamental assessments suggests that the current uptrend in ALLT may have further room to run.

Key Decisions for Investors

• Investors employing trend-following strategies should consider Allot Communications (ALLT) due to its substantial recent price appreciation (34.5% over 12 weeks) coupled with strong fundamental support, including a Zacks Rank #1 and consensus Strong Buy from brokers.
• It is advisable to closely monitor ongoing earnings estimate revisions and any changes in analyst ratings for ALLT, as these factors are highlighted as critical to its current positive evaluation and price trajectory.
• While ALLT presents a compelling case based on current data, investors should remain cognizant of the inherent risks in momentum-driven investments and acknowledge that sustained fundamental strength is essential for the trend's continuation.