Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Allot Communications (NASDAQ:ALLT) dropped a lot today, down by as much as 26%, after an analyst downgraded the stock.

So what: Oppenheimer cut its rating on Allot from outperform to perform, expressing a belief that the business was slowing down and that a fourth quarter miss could be in store for investors. The company may be facing headwinds in Europe and order activity may have weakened based on the analyst's checks.

Now what: Allot's book-to-bill may fall below 1, and the analyst expects sales to come in at $28.6 million with net income of $5 million. The consensus estimate calls for a top line of over $31 million in sales and a bottom-line profit of $5.5 million. Losing over 25% of its value on one analyst opinion may seem a bit excessive, but big swings are par for the course when you're talking about a small cap company valued at just $440 million and trading at over 36 times earnings.

Interested in more info on Allot Communications? Add it to your watchlist by clicking here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.