Allot Ltd. (ALLT) DCF Valuation & Fundamental Primer
Allot Ltd. (ALLT) trades at $7.95 with a market enterprise value of $350.1M and generated $102.0M in TTM revenue and $15.5M in free cash flow (filed 2026-03-31 (period ended 2025-12-31)). Our 5-year DCF model estimates an implied intrinsic value of $3.20 per diluted share ($130.5M DCF enterprise value, Grade: A · 87/100 · High-Quality Compounder).
SEC 10-K/10-Q DCF teardown of Allot Ltd. (ALLT): $102.0M TTM revenue (-8.5% growth), 71.1% GAAP gross margin, 15.2% FCF margin, 4.9% SBC/revenue, and R&D Return Grade CCC (Burners, $0.34 new gross profit per $1 prior R&D).
Allot Ltd. (ALLT) earns a "Pass" rating and an institutional Quality Score of 87/100 (Grade A). On $102.0M in baseline revenue (-8.5% growth, 71.1% gross margin, 15.2% FCF margin), our 5-year DCF yields an Enterprise Value of $130.5M ($3.20/share vs. $7.95 market price). On the R&D Return Benchmark, ALLT ranks #112 of 174 (Burners · Grade CCC, 0.34× return).
Gross Margin & Unit Economics: Allot Ltd. operates at a 71.1% gross margin on $102.0M revenue (1.3 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Burners · Grade CCC): Investing 24.0% of revenue in R&D ($24.5M) generates $0.34 of incremental gross profit per R&D dollar (Rank #112 of 174).
Rule of 40 & Cash Conversion: Combining -8.5% top-line growth with 15.2% FCF margin yields a 6.7% Rule of 40 score (vs. 38.4% cohort median) and $130.5M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (71.1% Gross Margin · -8.5% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $102.0M | $93.3M | $85.4M |
| Cost of Revenue (COGS) | ($29.4M) | ($26.5M) | ($23.8M) |
| Gross Profit & Margin | $72.6M (71.1%) | $66.8M (71.6%) | $61.6M (72.1%) |
| Research & Development (R&D) | $26.1M | $22.9M | $20.1M |
| Sales & Marketing (S&M) | $30.8M | $27.1M | $23.7M |
| General & Administrative (G&A) | $12.0M | $10.5M | $9.2M |
| Operating EBIT | $3.6M (3.5%) | $6.3M (6.7%) | $8.5M (9.9%) |
| Adjusted EBITDA | $6.2M (6.0%) | $8.6M (9.2%) | $10.6M (12.4%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 71.1% to 76.1%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $2.0M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $91.1M.
Allot Ltd. (ALLT) 3-Scenario DCF Valuation Range
Stress-test ALLT's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands ALLT's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $7.95).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $3.48 -56% | $3.65 -54% | $3.85 -52% | $4.09 -49% | $4.37 -45% |
| 9.3% | $3.20 -60% | $3.33 -58% | $3.49 -56% | $3.67 -54% | $3.88 -51% |
| 10.0% | $2.97 -63% | $3.07 -61% | $3.20 -60% | $3.34 -58% | $3.50 -56% |
| 10.8% | $2.77 -65% | $2.86 -64% | $2.96 -63% | $3.07 -61% | $3.20 -60% |
| 11.5% | $2.60 -67% | $2.68 -66% | $2.76 -65% | $2.85 -64% | $2.95 -63% |
Institutional Software Quality Scorecard (87/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Minimal dilution friction; management compensation aligned with shareholders
Solid gross margins with potential for operating leverage at scale
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 430% of EBIT driven by upfront annual collections
- Low dilution friction: SBC is only 4.9% of revenue
- Net cash positive: $17.1M balance sheet buffer
Key Operational & Dilution Risks
Audited R&D Intensity is 24.0% of revenue with a 0.34× incremental gross profit return per R&D dollar. Under your current Stage 1 (-8.5% CAGR / 71.1% GM) assumptions, ALLT projects to -0.25× R&D Return (Grade D · Burners).
Reverse-DCF Solver: What Growth is Priced Into ALLT?
The current share price demands 14.8% 5-year CAGR (29.4% net of SBC & dilution)—a +23.3% acceleration over historical run-rate (-8.5%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (4.9% of revenue) and annual share dilution (7.5%/yr). Accounting for both requires 29.4% 5-year revenue CAGR to justify $7.95/sh on a true per-share economic cash flow basis.
Allot Ltd. (ALLT) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $102.0M | $102.0M | $93.3M | $85.4M | $78.1M | $71.5M | $65.4M |
| Gross Profit | $72.6M | $72.5M | $66.4M | $60.7M | $55.6M | $50.8M | $46.5M |
| Operating Income (EBIT) | $3.6M | $3.6M | $3.3M | $3.0M | $2.8M | $2.5M | $2.3M |
| Stock-Based Compensation (SBC) | $5.0M | $5.0M | $4.6M | $4.2M | $3.8M | $3.5M | $3.2M |
| Unlevered Free Cash Flow (FCF) | $15.5M | $15.5M | $14.2M | $13.0M | $11.9M | $10.9M | $9.9M |
| SBC-Adjusted True Cash Flow | $10.5M | $10.5M | $9.6M | $8.8M | $8.0M | $7.3M | $6.7M |
Software - Infrastructure Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.7 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Allot Ltd. | ALLT | $367.2M | $102.0M | 71.1% | 15.2% | 6.7% | 4.9% | 3.4× |
| Block, Inc. | XYZ | $41.67B | $25.04B | 46.4% | 15.5% | 23.7% | 4.8% | 1.6× |
| CoreWeave, Inc. | CRWV | $35.80B | $1.92B | 74.2% | -80.0% | 0.0% | 1.6% | 23.5× |
| VeriSign, Inc. | VRSN | $22.52B | $1.56B | 87.7% | 56.1% | 61.5% | 3.9% | 15.5× |
| CORPAY, INC. | CPAY | $22.17B | $3.97B | 78.1% | 44.4% | 52.1% | 2.9% | 7.2× |
| NetApp, Inc. | NTAP | $21.02B | $7.39B | 70.6% | 22.3% | 24.6% | 5.4% | 3.0× |
| Joint Stock Co Kaspi.kz | KSPI | $11,481.85B | $2,520.93B | 62.3% | 19.3% | 59.8% | — | 4.4× |
| Peer Cohort Median Benchmark (N=6) | 72.4% | 20.8% | 38.4% | 3.9% | 5.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 3.4× | $350.1M | $367.2M | $7.95 | 0.0% |
| -20% Multiple Compression | 2.7× | $280.1M | $297.2M | $6.43 | -20.0% |
| -35% Multiple Compression | 2.2× | $227.5M | $244.6M | $5.30 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $510.0M | $527.1M | $11.41 | +45.7% |
Frequently Asked Questions: Allot Ltd. (ALLT) Valuation
What is Allot Ltd. (ALLT)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Allot Ltd. (ALLT) has a Base Case implied value of $3.20 per share (with a Bear Case of $2.61 and a Bull Case of $3.64), compared to its current price of $7.95. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Allot Ltd. (ALLT)'s Rule of 40 score and Free Cash Flow margin?
Allot Ltd. achieves a Rule of 40 score of 6.7%, combining a -8.5% revenue growth run-rate with a 15.2% TTM free cash flow margin on $102.0M in trailing twelve-month revenue. In the Software - Infrastructure peer cohort, the median Rule of 40 benchmark is 38.4%.
What revenue growth rate is priced into ALLT stock according to Reverse-DCF analysis?
At $7.95 per share (Enterprise Value of $350.1M), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 14.8%, compared to Allot Ltd.'s historical CAGR of -8.5%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
What is Allot Ltd. (ALLT)'s R&D Return Score and innovation productivity?
On the Golden Door Software R&D Return Benchmark, Allot Ltd. (ALLT) is ranked #112 out of 174 scored software peers, earning a Grade CCC in the "Burners" quadrant. Allot Ltd. invests 24.0% of FY revenue into R&D ($24.5M) and generated $0.34 of incremental gross profit per prior-year R&D dollar.
How does Allot Ltd. compare to Software - Infrastructure peers?
Allot Ltd. (ALLT) earns an institutional Software Quality Score of 87/100 (Grade A — High-Quality Compounder). Across its Software - Infrastructure peer group (XYZ, CRWV, VRSN, CPAY, NTAP), the cohort trades at a median EV/TTM Revenue multiple of 5.8× and a median gross margin of 72.4%.
How does Stock-Based Compensation (SBC) impact Allot Ltd. (ALLT)'s valuation?
Allot Ltd. recorded $5.0M in TTM stock-based compensation (4.9% of revenue). When treating SBC as a cash-equivalent compensation expense, Allot Ltd.'s SBC-adjusted free cash flow yield is 2.9%, scoring 25/25 on our Shareholder Dilution Friction pillar.