Financial Review: Allot (NASDAQ:ALLT) versus Motorola Solutions (NYSE:MSI)

Allot (NASDAQ:ALLT) and Motorola Solutions (NYSE:MSI) are both technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Institutional & Insider Ownership

51.5% of Allot shares are held by institutional investors. Comparatively, 84.2% of Motorola Solutions shares are held by institutional investors. 3.4% of Allot shares are held by company insiders. Comparatively, 1.3% of Motorola Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Allot has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500. Comparatively, Motorola Solutions has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Earnings and Valuation

This table compares Allot and Motorola Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allot	$108.95 million	3.54	$3.70 million	$0.22	36.05
Motorola Solutions	$11.68 billion	6.91	$2.15 billion	$12.70	38.38

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

Profitability

This table compares Allot and Motorola Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Allot	9.40%	9.64%	5.99%
Motorola Solutions	17.44%	98.22%	12.87%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Allot and Motorola Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allot	1	1	4	0	2.50
Motorola Solutions	0	2	10	1	2.92

Allot currently has a consensus target price of $13.38, suggesting a potential upside of 68.66%. Motorola Solutions has a consensus target price of $519.44, suggesting a potential upside of 6.56%. Given Allot’s higher possible upside, analysts plainly believe Allot is more favorable than Motorola Solutions.

Summary

Motorola Solutions beats Allot on 12 of the 15 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 Motorola Solutions

Motorola Solutions, Inc. provides public safety and enterprise security solutions in the United States, the United Kingdom, Canada, and internationally. The company operates in two segments, Products and Systems Integration, and Software and Services. The Products and Systems Integration segment offers a portfolio of infrastructure, devices, accessories, and video security devices and infrastructure, as well as the implementation and integration of systems, devices, software, and applications for government, public safety, and commercial customers who operate private communications networks and video security solutions, as well as manage a mobile workforce. Its land mobile radio communications, and video security and access control devices include two-way portable and vehicle-mounted radios, fixed video cameras, and accessories; communications network core and central processing software, base stations, consoles, and repeaters; and video analytics, network video management hardware and software, and access control solutions. The Software and Services segment provides public safety and enterprise command center, unified communications applications, mobile video equipment, and video software solutions; repair, technical support, and maintenance services; and monitoring, software updates, and cybersecurity services to government, public safety, and commercial communications networks. It serves hospitality; manufacturing; military and defence; public safety; mining; oil and gas; transportation and logistics; utilities industries. The company was formerly known as Motorola, Inc. and changed its name to Motorola Solutions, Inc. in January 2011. Motorola Solutions, Inc. was founded in 1928 and is headquartered in Chicago, Illinois.