UPDATE: Jefferies Downgrades Allot Communications to Hold

Jefferies cuts its rating on Allot Communications

due to valuation, but raises its price target from $21 to $25 as fundamentals remain strong. Jefferies says, "We raise our target to $25 based on checks that indicate continued strong fundamentals; however, we believe our new target's 42x P/E represents a full valuation. We already est a strong OM ramp from 16.8% in Q1 to 24.4% in Q4 and are above the St for 2012 EPS ($0.60 vs. St $0.55). Also, while we think Allot's U.S. carrier business could increase in 2012, we do not expect tier-1 U.S. mobile revenues this year." ALLT closed at $23.54 on Tuesday.