Contrasting Allot (NASDAQ:ALLT) and Bitfarms (NASDAQ:BITF)

Allot (NASDAQ:ALLT) and Bitfarms (NASDAQ:BITF) are both business services companies, but which is the better business? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, valuation, analyst recommendations and dividends.

Earnings and Valuation

This table compares Allot and Bitfarms”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Allot	$101.99 million	3.47	$3.70 million	$0.13	55.92
Bitfarms	$229.28 million	17.35	-$138.65 million	($0.23)	-28.70

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Allot	5.68%	7.38%	4.70%
Bitfarms	-48.26%	-4.48%	-3.71%

Analyst Recommendations

This is a breakdown of recent ratings for Allot and Bitfarms, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Allot	1	1	5	0	2.57
Bitfarms	1	1	6	0	2.63

Allot currently has a consensus target price of $13.63, indicating a potential upside of 87.41%. Bitfarms has a consensus target price of $4.14, indicating a potential downside of 37.27%. Given Allot’s higher probable upside, analysts clearly believe Allot is more favorable than Bitfarms.

Volatility & Risk

Allot has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Bitfarms has a beta of 3.77, indicating that its share price is 277% more volatile than the S&P 500.

Insider and Institutional Ownership

51.5% of Allot shares are owned by institutional investors. Comparatively, 20.6% of Bitfarms shares are owned by institutional investors. 3.4% of Allot shares are owned by company insiders. Comparatively, 9.5% of Bitfarms shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Allot beats Bitfarms 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 Bitfarms

Bitfarms Ltd. engages in the mining of cryptocurrency coins and tokens in Canada, the United States, Paraguay, and Argentina. It owns and operates server farms that primarily validates transactions on the Bitcoin Blockchain and earning cryptocurrency from block rewards and transaction fees. The company also provides electrician services to commercial and residential customers in Quebec, Canada. It also undertakes hosting of third-party mining hardware. The company was founded in 2017 and is based in Toronto, Canada.