Allot Communications (NASDAQ: ALLT) was initiated at Overweight by Cantor Fitzgerald with a 12-month price target of $15.

The analyst said Allot was undergoing a strategic transition from a mature network-intelligence provider to a security-focused consumer company, with security-as-a-service (SECaaS) emerging as the primary growth driver. While legacy revenue remained volatile due to customer concentration and structural shifts in telecom, Cantor said the company's fundamentals were inflecting.

SECaaS accounted for 28% of revenue, with annual recurring revenue up 60% year over year in the third quarter of 2025. Cantor expected the segment to exceed 60% of total revenue over time, supported by carrier-led distribution, increasing AI-driven cyber threats, and rising SMB and consumer demand for bundled security offerings.

The firm highlighted recent contract wins, including Verizon Business and a large Tier-1 EMEA SG-Tera III deployment, which it said provided multi-year visibility and upside to forecasts. Despite these improvements, Allot traded at roughly 3.8x estimated FY26 EV/sales, well below peers at approximately 7.4x. Cantor said expanding recurring revenue, high incremental margins at scale, and multiple growth catalysts supported the potential for renewed growth and a valuation re-rating.