Allot Communications (ALLT) Surges 8.0%: Is This an Indication of Further Gains?

Allot Communications (ALLT) shares ended the last trading session 8% higher at $9.21. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 4.6% loss over the past four weeks.

The sharp rise in the stock price was fueled by optimistic investor sentiment, sparked by recent analyst upgrades, promising earnings potential, an expanding customer base, and the effective rollout of the company’s security solutions.

This internet protocol services company is expected to post break-even quarterly earnings per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $22.9 million, up 3.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Allot Communications, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ALLT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Allot Communications is part of the Zacks Technology Services industry. Ibotta (IBTA), another stock in the same industry, closed the last trading session 3.3% lower at $35.26. IBTA has returned -26.1% in the past month.

For Ibotta, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.18. This represents a change of +113.6% from what the company reported a year ago. Ibotta currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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