Financial Analysis: Zayo Group Holdings (ZAYO) & Allot Communications (ALLT)
Allot Communications (NASDAQ: ALLT) and Zayo Group Holdings (NYSE:ZAYO) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, valuation, earnings, analyst recommendations and risk.
Valuation and Earnings
This table compares Allot Communications and Zayo Group Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Allot Communications||$85.87 million||1.93||-$4.76 million||($0.34)||-14.73|
|Zayo Group Holdings||$2.07 billion||3.85||$935.90 million||$0.12||270.17|
Zayo Group Holdings has higher revenue and earnings than Allot Communications. Allot Communications is trading at a lower price-to-earnings ratio than Zayo Group Holdings, indicating that it is currently the more affordable of the two stocks.
This table compares Allot Communications and Zayo Group Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Zayo Group Holdings||1.53%||5.47%||0.96%|
This is a summary of recent ratings and recommmendations for Allot Communications and Zayo Group Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Zayo Group Holdings||1||6||11||0||2.56|
Allot Communications presently has a consensus target price of $5.00, indicating a potential downside of 0.20%. Zayo Group Holdings has a consensus target price of $37.75, indicating a potential upside of 16.44%. Given Zayo Group Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Zayo Group Holdings is more favorable than Allot Communications.
Risk & Volatility
Allot Communications has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Zayo Group Holdings has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Insider and Institutional Ownership
42.3% of Allot Communications shares are owned by institutional investors. Comparatively, 74.3% of Zayo Group Holdings shares are owned by institutional investors. 5.8% of Zayo Group Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Zayo Group Holdings beats Allot Communications on 13 of the 13 factors compared between the two stocks.
Allot Communications Company Profile
Allot Communications Ltd. (Allot) is a global provider of security and monetization solutions that enable mobile, fixed and enterprise service providers to protect and personalize the digital experience. The Company has a global and diverse customer base composed of mobile and fixed broadband service providers, cable operators, private networks, data centers, governments and enterprises, such as financial and educational institutions. Its integrated solutions include analytics, traffic management, video caching and optimization, policy control and charging, service enablement and security solutions. The Allot Service Gateway platforms (including Allot Service Gateway Tera, and Allot Service Gateway 9500), as well as Allot NetEnforcer platforms are based on technology, designed for in-line deployment in a range of networks. Allot service Gateway platforms are designed for deployment both on traditional and virtualized network access infrastructure.
Zayo Group Holdings Company Profile
Zayo Group Holdings, Inc. provides communications infrastructure services, including fiber and bandwidth connectivity, colocation and cloud infrastructure to a range of businesses. The Company operates in five segments: Dark Fiber Solutions, Network Connectivity, Colocation and Cloud Infrastructure, Zayo Canada and Other. Its products include leased dark fiber, fiber to cellular towers and small cell sites, wavelength connections, Ethernet, Internet Protocol (IP) connectivity and cloud services. Its products and services enable high-bandwidth applications, such as cloud-based computing, video, mobile, social media and machine-to-machine connectivity. As of March 1, 2017, the Company operated 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber across Denver, Minneapolis, Phoenix, Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane and Boise, with on-net connectivity to over 3,100 enterprise buildings and 100 data centers.
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