Financial Contrast: Clearfield (NASDAQ:CLFD) versus Allot (NASDAQ:ALLT)

Allot (NASDAQ:ALLT) and Clearfield (NASDAQ:CLFD) are both small-cap technology companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Institutional & Insider Ownership

51.5% of Allot shares are owned by institutional investors. Comparatively, 88.7% of Clearfield shares are owned by institutional investors. 3.4% of Allot shares are owned by insiders. Comparatively, 17.8% of Clearfield shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Allot has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500. Comparatively, Clearfield has a beta of 2.11, meaning that its stock price is 111% more volatile than the S&P 500.

Profitability

This table compares Allot and Clearfield’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allot	9.40%	9.64%	5.99%
Clearfield	-4.71%	1.61%	1.45%

Earnings and Valuation

This table compares Allot and Clearfield”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allot	$101.99 million	4.00	$3.70 million	$0.22	38.09
Clearfield	$150.13 million	2.60	-$8.05 million	($0.51)	-56.33

Allot has higher earnings, but lower revenue than Clearfield. Clearfield is trading at a lower price-to-earnings ratio than Allot, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Allot and Clearfield, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allot	1	1	4	0	2.50
Clearfield	1	1	5	0	2.57

Allot currently has a consensus price target of $13.38, indicating a potential upside of 59.61%. Clearfield has a consensus price target of $41.75, indicating a potential upside of 45.32%. Given Allot’s higher probable upside, equities research analysts plainly believe Allot is more favorable than Clearfield.

Summary

Allot beats Clearfield on 8 of the 14 factors compared between the two stocks.

About Allot

Allot Communications Ltd. is a provider of leading innovative network intelligence and security solutions for service providers worldwide, enhancing value to their customers. Their solutions are deployed globally for network and application analytics, traffic control and shaping, network-based security services, and more. Allot’s multi-service platforms are deployed by over 500 mobile, fixed and cloud service providers and over 1000 enterprises. Their industry leading network-based security as a service solution has achieved over 50% penetration with some service providers and is already used by over 20 million subscribers in Europe.

About Clearfield

Clearfield, Inc. manufactures and sells various fiber connectivity products in the United States and internationally. The company offers FieldSmart, a series of panels, cabinets, wall boxes, and other enclosures; WaveSmart, an optical components integrated for signal coupling, splitting, termination, multiplexing, demultiplexing, and attenuation for integration within its fiber management platform; and active cabinet products. It also provides CraftSmart FiberFirst pedestals, an access terminal that offers a cable management and mounting bracket kit to support the deployment of access terminals; YOURx, an access terminal that provides flexibility with cable mid-span and internal splicing options; and FieldShield, a fiber pathway and protection method for reducing the cost of broadband deployment. In addition, the company offers fiber assemblies; fiber optic and copper cables, microducts, microduct accessories, and tools; and installation and connection accessories for fiber optic networks. It serves community broadband customers, multiple system operators, large regional service providers, and wireline/wireless national telco carriers. The company was formerly known as APA Enterprises, Inc. and changed its name to Clearfield, Inc. in January 2008. Clearfield, Inc. was incorpoarted in 1979 and is headquartered in Minneapolis, Minnesota.