Allot Communications shares have climbed 20.6% over the past six months, driven by accelerating demand for its Security-as-a-Service (SECaaS) solutions and an upward revision to the company’s annual guidance. Investors have responded positively to Allot’s transition away from its legacy network-intelligence offerings toward a subscription-based security model, which now underpins a growing share of total revenue.

In the third quarter of fiscal 2025, SECaaS accounted for 28% of Allot’s revenues, with annual recurring revenue (ARR) in the segment up 60% year-over-year. Management highlighted that carrier-led distribution partnerships, rising AI-driven cyber threats and stronger demand among small-to-medium businesses have positioned SECaaS to surpass 60% of total revenue over time. The company’s improving mix has elevated its subscription-renewal rates and boosted gross margins.

Cantor Fitzgerald initiated coverage of Allot with an Overweight rating and a 12-month price target of $15, noting that the stock trades at approximately 3.8x estimated fiscal 2026 EV/sales versus peers at 7.4x. The broker emphasized contract wins such as Verizon Business and a major Tier-1 EMEA SG-Tera III deployment, which together provide multi-year revenue visibility. Cantor analysts cited Allot’s high incremental margins at scale and multiple growth catalysts as key drivers for a potential valuation re-rating.