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Radware Ltd (RDWR)
NASDAQ:RDWR
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Radware
(NASDAQ:RDWR)
60Neutral
Positive Factors
Financial Performance
RDWR delivered a strong 4Q, beating consensus Rev/EPS by 2%/+$0.03 and guiding 1Q above expectations.
Revenue Streams
Radware's plans to reaccelerate Cloud ARR growth suggest a focus on expanding revenue streams.
Negative Factors
Cloud ARR Growth
Investors likely took caution on slowing Cloud ARR growth of 15%, down from 23% in the March quarter.
Stock Rating
While more constructive on RDWR stock, Hold rating is maintained, pending a consistent trend of Revenue re-acceleration.
Radware (RDWR) vs. S&P 500 (SPY)
Market Cap
$941.46M
Dividend YieldN/A
Average Volume (3M)154.36K
Price to Earnings (P/E)163.9
Beta (1Y)0.70
Revenue Growth5.20%
EPS GrowthN/A
CountryUS
Employees1,218
SectorTechnology
Sector Strength46
IndustrySoftware
Share Statistics
EPS (TTM)0.14
Shares Outstanding41,786,950
10 Day Avg. Volume177,453
30 Day Avg. Volume154,360
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.67
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.00Price Target Upside24.28% Upside
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 generates revenue primarily through the sale of its cybersecurity and application delivery solutions. The company's revenue model is based on a combination of product sales, subscription services, and maintenance and support contracts. Key revenue streams include the sale of hardware and software products, as well as cloud-based security services. Radware also earns from professional services such as consulting, implementation, and training. Significant partnerships with technology vendors and service providers enhance its market reach and contribute to its earnings by facilitating the deployment and integration of its solutions in diverse IT environments.
Radware Financial Statement Overview
Summary
Radware's financials exhibit a mixed picture with strengths in revenue growth and cash flow improvements, but persistent challenges in profitability and operational efficiency. The balance sheet remains robust with low leverage, providing a stable financial foundation. Continued focus on improving operational metrics could enhance overall financial health.Income Statement
Radware shows a moderate gross profit margin of 80.6% for 2024, indicating efficient cost management. However, the negative EBIT and fluctuating net income margins highlight profitability challenges. The revenue growth rate of 5.19% from 2023 to 2024 suggests a positive trend in sales, but persistent losses in EBIT indicate underlying operational inefficiencies.65
Positive
Balance Sheet
The company maintains a solid equity position with an equity ratio of 51.1% in 2024. The debt-to-equity ratio is low at 0.06, suggesting minimal leverage and financial stability. ROE improved to 1.91% in 2024, reflecting a slight return to profitability, though the overall return remains modest.70
Positive
Cash Flow
Radware demonstrates significant improvement in free cash flow from negative in 2023 to $66.33 million in 2024, reflecting better cash management. The operating cash flow to net income ratio is robust at 11.86, indicating strong cash generation relative to net income. However, historical volatility in cash flows suggests potential risks in sustaining this performance.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 274.88M | 261.29M | 293.43M | 286.50M | 250.03M | Gross Profit |
| 221.63M | 209.58M | 239.54M | 234.05M | 204.94M | EBIT |
| -3.19M | -31.68M | -3.34M | 18.23M | 6.17M | EBITDA |
| 24.50M | -19.44M | 8.35M | 28.42M | 16.73M | Net Income Common Stockholders |
| 6.04M | -21.59M | -166.00K | 7.81M | 9.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 275.78M | 330.59M | 298.04M | 287.89M | 310.49M | Total Assets |
| 618.68M | 571.92M | 647.40M | 634.87M | 623.44M | Total Debt |
| 18.27M | 20.70M | 24.15M | 27.45M | 30.07M | Net Debt |
| -80.44M | -49.83M | -22.04M | -65.06M | -24.70M | Total Liabilities |
| 261.60M | 248.64M | 278.96M | 264.87M | 234.98M | Stockholders Equity |
| 316.27M | 284.09M | 332.16M | 369.99M | 388.46M |
| Cash Flow | Free Cash Flow | |||
| 66.33M | -8.93M | 23.33M | 66.17M | 53.14M | Operating Cash Flow |
| 71.61M | -3.50M | 32.15M | 71.77M | 61.81M | Investing Cash Flow |
| -39.52M | 92.78M | -56.02M | 7.85M | -14.37M | Financing Cash Flow |
| -3.91M | -64.93M | -22.46M | -41.88M | -33.42M |
Radware Technical Analysis
Positive
22.53
Price Trends
22.48
Positive
22.62
Negative
21.65
Positive
Market Momentum
0.07
Negative
51.13
Neutral
74.45
Neutral
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 22.53 is above the 20-day moving average (MA) of 22.12, above the 50-day MA of 22.48, and above the 200-day MA of 21.65, indicating a bullish trend. The MACD of 0.07 indicates Negative momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 74.45 is Neutral, 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 (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $24.69B | 30.56 | 30.15% | ― | 6.22% | 6.15% | |
79 Outperform | $15.73B | 27.15 | 19.51% | ― | 3.02% | 31.36% | |
78 Outperform | $122.46B | 104.49 | 23.38% | ― | 13.86% | -46.44% | |
76 Outperform | $78.50B | 44.69 | 338.74% | ― | 12.27% | 54.69% | |
74 Outperform | $245.86B | 26.73 | 20.02% | 2.62% | -5.34% | -30.57% | |
60 Neutral | $941.46M | 163.85 | 2.01% | ― | 5.20% | ― | |
58 Neutral | $21.67B | 10.60 | -18.43% | 2.42% | 4.66% | -24.45% |
* Technology Sector Average
Performance Comparison
RDWR
Radware
22.53
3.81
20.35%
CHKP
Check Point
231.31
67.30
41.03%
CSCO
Cisco Systems
61.40
13.02
26.91%
FFIV
F5 Networks
270.08
80.49
42.45%
FTNT
Fortinet
99.54
31.23
45.72%
PANW
Palo Alto Networks
174.44
32.38
22.79%
Radware Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -3.01% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance for Radware in 2024, with significant growth in revenue, particularly in the cloud security and Americas segments. The company's strategic focus on AI-driven solutions and OEM partnerships is driving growth and competitive positioning. However, there are challenges in the EMEA market with a decline in revenue. Overall, the highlights significantly outweigh the lowlights, indicating a robust performance and positive outlook.Highlights
Strong Revenue Growth
Radware reported a 12% year-over-year revenue growth for Q4 2024, with full-year revenue increasing by 5% to $275 million.
Cloud ARR Acceleration
Cloud ARR grew 19% in Q4 2024, up from 15% in Q3 2024, contributing to a total ARR growth of 8% year-over-year to $227 million.
Increased Profitability
Operating income nearly tripled in Q4 2024 to $9 million, with a full-year operating income of $26.8 million, reflecting strong operational efficiency.
Strong Performance in the Americas
Revenue in the Americas increased 33% year-over-year in Q4 2024, contributing to a 14% year-over-year growth for the full year.
Strategic OEM Partnerships
Cisco and Check Point sustained double-digit growth in Q4, setting a new annual record for total OEM bookings.
AI-Driven Innovations
Significant strides in AI integration, including the release of AI SOC Xpert, cutting resolution time by up to 95%.
Lowlights
Decline in EMEA Revenue
Q4 2024 revenue in EMEA declined by 6% year-over-year, contributing to a full-year revenue decrease of 2%.
Company Guidance
During the Radware conference call discussing the fourth quarter and full year 2024 results, the company provided guidance and insights into their financial performance and strategic focus areas for 2025. The fourth quarter saw a 12% year-over-year revenue growth, with non-GAAP earnings per share more than doubling, driven largely by the cloud security business, which accelerated its annual recurring revenue (ARR) growth to 19%. The company plans to increase investments in cloud security by opening new centers, enhancing R&D, and expanding OEM and MSSP partnerships, aiming for over 20% ARR growth and a $100 million ARR cloud security business by the end of 2025. Financially, Radware reported a gross margin of 82.4% for Q4, with operating income nearly tripling to $9 million. Regional performance varied, with 33% revenue growth in the Americas, a 6% decline in EMEA, and an 8% increase in APAC. Looking forward, Radware anticipates Q1 2025 revenue between $70 million and $71 million, with non-GAAP diluted earnings per share expected to be between $0.22 and $0.23. The company remains focused on strategic investments in cloud security and AI-driven solutions, maintaining a disciplined approach to expenses while prioritizing revenue growth.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.