Radware (RDWR) AI Stock Analysis

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Radware

(NASDAQ:RDWR)

70Outperform

Radware's stock is moderately attractive with strengths in revenue growth and strategic advancements in cloud security. However, challenges in profitability and a high P/E ratio suggest caution. The positive technical indicators and strong earnings call performance support an optimistic outlook, though attention is needed for potential regional revenue stagnation and valuation concerns.

Positive Factors

Financial Performance

Radware delivered a strong quarter, surpassing consensus on both revenue and earnings per share.

Market Strategy

Radware's new initiatives aim to drive future growth and innovation, signaling a proactive approach in market strategy.

Revenue Growth

Cloud ARR growth remained robust with a notable 19% increase, contributing to the overall revenue growth for the third consecutive quarter.

Negative Factors

Revenue Uncertainty

The need for a consistent trend of revenue re-acceleration raises uncertainty about maintaining growth momentum.

Stock Rating

Despite positive performance, a Hold rating is maintained for Radware stock, awaiting a consistent trend of revenue re-acceleration.

Radware (RDWR) vs. S&P 500 (SPY)

Market Cap

$971.55M

Dividend YieldN/A

Average Volume (3M)149.57K

Price to Earnings (P/E)165.5

Beta (1Y)0.81

Revenue Growth9.54%

EPS GrowthN/A

CountryUS

Employees1,137

SectorTechnology

Sector Strength65

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.27

Shares Outstanding42,686,535

10 Day Avg. Volume173,118

30 Day Avg. Volume149,566

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.79

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit3.47

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.00

Price Target Upside20.43% 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 strengths in revenue growth and cash flow improvements, with a solid balance sheet featuring low leverage. However, persistent challenges in profitability and operational efficiency, as indicated by negative EBIT and fluctuating net income margins, present ongoing concerns.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Neutral

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price22.42

Price Trends

50DMA

21.92

Positive

100DMA

22.25

Negative

200DMA

22.17

Negative

Market Momentum

MACD

0.33

Positive

RSI

47.43

Neutral

STOCH

34.16

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RDWR, the sentiment is Negative. The current price of 22.42 is above the 20-day moving average (MA) of 22.15, above the 50-day MA of 21.92, and above the 200-day MA of 22.17, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 47.43 is Neutral, neither overbought nor oversold. The STOCH value of 34.16 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATEN	73 Outperform	$1.26B	24.89	24.36%	1.41%	4.90%	9.91%
RDWR	70 Outperform	$971.55M	165.53	3.78%	―	9.54%	―
AKAM	70 Outperform	$12.11B	25.40	10.66%	―	4.70%	-7.33%
VRNT	67 Neutral	$1.08B	17.76	6.35%	―	-0.13%	263.78%
NTCT	67 Neutral	$1.51B	―	-24.41%	―	-1.55%	-250.10%
Sector *	60 Neutral	$10.77B	10.41	-6.71%	2.99%	7.69%	-13.12%
CGNT	57 Neutral	$690.78M	―	-6.09%	―	―	―

* Technology Sector Average

Performance Comparison

RDWR

Radware

22.03

2.31

11.71%

AKAM

Akamai

85.44

-17.02

-16.61%

NTCT

Netscout Systems

21.56

1.06

5.17%

VRNT

Verint Systems

18.03

-13.96

-43.64%

ATEN

A10 Networks

16.91

1.64

10.74%

CGNT

Cognyte Software

9.70

2.06

26.96%

Radware Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -1.49%|

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.

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.