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Radware Ltd (RDWR)
NASDAQ:RDWR
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Radware
(NASDAQ:RDWR)
Rating:68Neutral
Price Target:
$32.00
▲(7.82%Upside)
Positive Factors
Cloud Revenue Growth
Cloud annual recurring revenue growth remained strong at 19%, marking a continued positive trend.
Earnings Performance
RDWR delivered a strong quarter, beating consensus revenue and earnings per share expectations.
Market Strategy
Changes in the go-to-market strategy indicate a proactive approach to capturing more market share.
Negative Factors
Revenue Trends
Despite positive performance, a consistent trend of revenue re-acceleration is needed to alter the current stock rating.
Stock Rating
A Hold rating is maintained for RDWR stock, awaiting a consistent trend of revenue re-acceleration.
Radware (RDWR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.26B
Dividend YieldN/A
Average Volume (3M)323.98K
Price to Earnings (P/E)112.0
Beta (1Y)0.88
Revenue Growth9.54%
EPS GrowthN/A
CountryUS
Employees1,137
SectorTechnology
Sector Strength86
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.27
Shares Outstanding42,686,535
10 Day Avg. Volume633,066
30 Day Avg. Volume323,977
Financial Highlights & Ratios
PEG Ratio52.33
Price to Book (P/B)2.67
Price to Sales (P/S)0.00
P/FCF Ratio38.04
Enterprise Value/Market Cap0.69
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit3.81
Enterprise Value/Ebitda65.68
Forecast
1Y Price Target
$27.50Price Target Upside-7.35% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Radware Business Overview & Revenue Model
Company DescriptionRadware Ltd., together with its subsidiaries, develops, manufactures, and markets cyber security and application delivery solutions for applications in cloud, physical, and software defined data centers worldwide. The company offers DefensePro, a real-time network attack mitigation device; AppWall, a Web application firewall; Radware Kubernetes WAF, a Web application firewall solution for CI/CD environments orchestrated by Kubernetes; and DefenseFlow, a cyber-command and control application. It also provides Alteon, an application delivery controller/load balancer for web, cloud, and mobile based applications; and LinkProof NG, a multi-homing and enterprise gateway solution for connectivity of enterprise and cloud-based applications. In addition, the company offers Security Updates Subscription, which provides protection from network elements, hosts and applications against the latest security vulnerabilities and threats; ERT Active Attackers Feed that provides customers with information pertaining to attack sources recently involved in DDoS attacks and web attacks; Alteon Global Elastic License that enables a high level of flexibility for ADC services across datacenters, private and public clouds; APSolute Vision, a network monitoring tool for cyber security and application delivery solutions; and MSSP Portal, a DDoS detection and mitigation service portal. Further, it provides Cloud DDoS Protection Service, which offers a range of enterprise-grade DDoS protection services in the cloud, as well as technical support, professional, managed, and training and certification services to its customers. The company sells its products primarily to independent distributors, including value added resellers, original equipment manufacturers, and system integrators. Radware Ltd. was founded in 1996 and is headquartered in Tel Aviv, Israel.
How the Company Makes MoneyRadware makes money primarily through the sale of its cybersecurity and application delivery solutions. The company's revenue streams include product sales, subscription services, and professional services. Product sales involve one-time purchases of hardware and software solutions. Subscription services generate recurring revenue through cloud-based offerings and security services that provide ongoing protection and updates. Professional services, which include consulting, training, and implementation support, also contribute to Radware's earnings. Key partnerships with technology providers, resellers, and managed security service providers (MSSPs) enhance the company's market reach and revenue potential.
Radware Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 30.40%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with significant growth in revenue and cloud security business, supported by strategic partnerships. However, there are concerns about revenue stagnation in APAC and potential tariffs, although these are not expected to have significant impacts.Q1-2025 Updates
Positive Updates
Strong Revenue Growth
First quarter revenue increased by 11% year-over-year to $72 million, marking the third consecutive quarter of double-digit revenue growth.
Cloud Security Business Success
Cloud security ARR grew by 19% year-over-year to $80 million, with the expectation to reach close to $100 million by the end of the year.
Significant OEM Partnerships
Partnerships with Cisco and Checkpoint saw over 20% growth year-over-year, with notable deals including a million-dollar five-year cloud deal with a UK retailer.
Increased Non-GAAP Earnings
Non-GAAP earnings per share increased by 69% to $0.27, with adjusted EBITDA for Q1 2025 increasing by 72% to $10.8 million.
Geographical Revenue Growth
EMEA revenue increased by 25% year-over-year, while the Americas saw a 14% year-over-year growth over the trailing twelve months.
Negative Updates
APAC Revenue Stagnation
APAC revenue was reported as flat year-over-year for the trailing twelve months.
Potential Tariff Impact
Although the impact is expected to be minimal, there was an initial concern about tariffs affecting the supply chain, prompting adjustments to reduce cost pressures.
Company Guidance
In the first quarter of 2025, Radware exceeded its guidance with strong financial performance and strategic advancements. Revenue increased by 11% year-over-year to $72 million, marking the third consecutive quarter of double-digit growth. The company reported a non-GAAP earnings per share increase of 69% to $0.27, and cash flow from operations reached $22 million. A significant contributor to this success was the cloud security business, with an annual recurring revenue (ARR) increase of 19% year-over-year to $80 million. Radware aims to achieve over 20% ARR growth and reach $100 million in cloud security ARR by the year's end. The company's strategy focuses on expanding market share in cloud security, leading in AI innovation, and enhancing its go-to-market presence, with recent expansions in cloud service centers across Peru, India, and Kenya. Looking ahead, Radware plans to increase investments in sales, marketing, and R&D to capitalize on growth opportunities, particularly in North America, supported by a new leadership team with expertise in driving ARR for SaaS companies.Radware Financial Statement Overview
Summary
Radware shows a stable financial performance with strong gross margins and effective cash flow management. The company maintains a conservative leverage profile, contributing to financial stability. However, the fluctuating net profit margins suggest areas for improvement in profitability. Overall, Radware is in a solid financial position with potential for growth through operational efficiencies.Income Statement
Radware's revenue growth has been modest in recent years, with a TTM (Trailing-Twelve-Months) increase of 2.54%. The gross profit margin remains strong at 80.68%, reflecting efficient cost management. However, net profit margins have been inconsistent, with a current TTM net profit margin of 4.12%. There's a noticeable improvement in EBIT and EBITDA margins, indicating enhanced operational efficiency.68
Positive
Balance Sheet
The debt-to-equity ratio is low at 0.05, indicating minimal leverage and financial stability. The equity ratio stands at 50.34%, showing a solid capital structure with significant equity financing. Return on equity has improved, now at 3.57%, suggesting better utilization of equity investments.75
Positive
Cash Flow
Radware exhibits robust cash flow management with a consistent free cash flow generation. The operating cash flow to net income ratio is high at 6.25, indicating strong cash generation relative to earnings. Free cash flow has grown modestly, reflecting efficient capital expenditure management.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 281.87M | 274.88M | 261.29M | 293.43M | 286.50M | 250.03M |
| Gross Profit | 227.44M | 221.63M | 209.58M | 239.54M | 234.05M | 204.94M |
| EBITDA | 13.55M | 7.95M | -19.44M | 8.35M | 28.42M | 16.73M |
| Net Income | 11.60M | 6.04M | -21.59M | -166.00K | 7.81M | 9.64M |
Balance Sheet | ||||||
| Total Assets | 645.69M | 618.68M | 571.92M | 647.40M | 634.87M | 623.44M |
| Cash, Cash Equivalents and Short-Term Investments | 291.72M | 275.78M | 330.59M | 298.04M | 287.89M | 310.49M |
| Total Debt | 17.14M | 18.27M | 20.70M | 24.15M | 27.45M | 30.07M |
| Total Liabilities | 279.62M | 261.60M | 248.64M | 278.96M | 264.87M | 234.98M |
| Stockholders Equity | 325.06M | 316.27M | 284.09M | 332.16M | 369.99M | 388.46M |
Cash Flow | ||||||
| Free Cash Flow | 67.99M | 66.33M | -8.93M | 23.33M | 66.17M | 53.14M |
| Operating Cash Flow | 72.57M | 71.61M | -3.50M | 32.15M | 71.77M | 61.81M |
| Investing Cash Flow | -30.05M | -39.52M | 92.78M | -56.02M | 7.85M | -14.37M |
| Financing Cash Flow | -3.07M | -3.91M | -64.93M | -22.46M | -41.88M | -33.42M |
Radware Technical Analysis
Positive
29.68
Price Trends
24.74
Positive
23.40
Positive
22.96
Positive
Market Momentum
1.54
Negative
84.27
Negative
96.32
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDWR, the sentiment is Positive. The current price of 29.68 is above the 20-day moving average (MA) of 26.95, above the 50-day MA of 24.74, and above the 200-day MA of 22.96, indicating a bullish trend. The MACD of 1.54 indicates Negative momentum. The RSI at 84.27 is Negative, neither overbought nor oversold. The STOCH value of 96.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RDWR.
Radware Risk Analysis
Radware disclosed 43 risk factors in its most recent earnings report. Radware reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Radware Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $11.64B | 26.80 | 9.82% | ― | 3.51% | -27.28% | |
74 Outperform | $1.12B | 27.60 | 5.32% | ― | -2.09% | 76.96% | |
73 Outperform | $1.42B | 29.68 | 24.36% | 1.21% | 4.90% | 9.91% | |
68 Neutral | $1.26B | 111.96 | 3.78% | ― | 9.54% | ― | |
61 Neutral | $1.77B | ― | -21.26% | ― | -0.82% | -146.80% | |
51 Neutral | $679.27M | ― | -4.06% | ― | ― | ― | |
49 Neutral | C$2.91B | 2.04 | -80.91% | 2.67% | 12.55% | -24.32% |
* Technology Sector Average
Performance Comparison
RDWR
Radware
29.68
10.55
55.15%
AKAM
Akamai
79.46
-11.01
-12.17%
NTCT
Netscout Systems
24.94
6.23
33.30%
VRNT
Verint Systems
21.44
-9.88
-31.55%
ATEN
A10 Networks
19.76
6.24
46.15%
CGNT
Cognyte Software
9.09
1.43
18.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.