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Radware Ltd (RDWR)
NASDAQ:RDWR
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Radware
(NASDAQ:RDWR)
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Rating:66Neutral
Price Target:
$27.00
▼(-2.03% Downside)
Radware's overall stock score is driven by strong financial performance and positive earnings call sentiment. However, the high valuation and neutral technical indicators moderate the score. The company's robust revenue growth and operational improvements are significant strengths, while the high P/E ratio and lack of dividend yield present valuation concerns.
Positive Factors
Revenue Growth
Consistent double-digit revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion.
Cloud ARR Growth
Accelerating cloud ARR growth reflects successful adoption of cloud services, positioning Radware well in the growing cybersecurity market.
Global Cloud Security Expansion
Expanding global cloud security centers enhances Radware's capability to mitigate cyber threats, strengthening its competitive position.
Negative Factors
Decreased Cash Flow
Reduced cash flow from operations could limit Radware's ability to invest in growth initiatives, affecting long-term financial flexibility.
Challenges in Large Enterprise Sales
Persistent sales challenges in large enterprises may hinder revenue growth, especially in key markets like North America.
Operational Expense Increase
Rising operational expenses could pressure margins, potentially impacting profitability if revenue growth does not offset these costs.
Radware (RDWR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.17B
Dividend YieldN/A
Average Volume (3M)186.55K
Price to Earnings (P/E)85.4
Beta (1Y)0.93
Revenue Growth11.51%
EPS GrowthN/A
CountryUS
Employees1,137
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.28
Shares Outstanding42,686,535
10 Day Avg. Volume252,301
30 Day Avg. Volume186,548
Financial Highlights & Ratios
PEG Ratio-1.22
Price to Book (P/B)2.99
Price to Sales (P/S)3.44
P/FCF Ratio14.26
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue3.79
Enterprise Value/Gross Profit4.70
Enterprise Value/Ebitda52.44
Forecast
1Y Price Target
$30.67Price Target Upside11.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
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 through a combination of product sales, subscription services, and managed services. Key revenue streams include the sale of hardware and software solutions, annual maintenance contracts, and cloud-based security services. The company also offers professional services such as consulting and implementation. Significant partnerships with cloud service providers and technology integrators enhance its market reach and contribute to earnings. Additionally, growing demand for cybersecurity solutions in response to increasing cyber threats has positively impacted Radware's revenue growth.
Radware Earnings Call Summary
Earnings Call Date:Jul 30, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
Radware demonstrated strong financial performance with consistent revenue growth and notable achievements in cloud ARR and major deals. However, challenges such as decreased cash flow compared to the previous year and persistent budget concerns in large enterprises were noted. The overall sentiment leans towards positive due to the significant outweighing of highlights over lowlights.Q2-2025 Updates
Positive Updates
Consistent Revenue Growth
Radware reported its fourth consecutive quarter of double-digit revenue growth with a 10% year-over-year increase to $74 million.
Strong Cloud ARR Growth
Cloud ARR growth accelerated from 19% to 21% year-over-year, reaching $85 million, surpassing the short-term target of 20%.
Impressive Non-GAAP Earnings Increase
Non-GAAP earnings per share rose 39% year-over-year to $0.28.
Significant Cash Flow from Operations
Generated $14.5 million in cash flow from operations, underscoring operational strength.
Major Wins in Cloud Security
Secured several 7-digit deals, including contracts with a European government, a major Asian bank, and a global sporting event.
Recognition in Application and API Security
Named a leader in the GigaOM Radar for application and API security for AI-driven capabilities.
Strong Regional Performance
EMEA revenue up 22% year-over-year, APAC revenue increased 30%, and stable performance in the Americas.
Negative Updates
Decreased Cash Flow Compared to Previous Year
Cash flow from operations in Q2 2025 was $14.5 million compared to $23 million in the same quarter last year.
Challenges in Large Enterprise Sales
Long sales cycles and budget concerns persist among large enterprises, particularly in North America.
Operational Expense Increase
Increased investment in sales, marketing, and R&D, contributing to higher operating expenses.
Company Guidance
During the second quarter of 2025, Radware demonstrated strong financial performance, achieving a 10% year-over-year revenue increase to $74.2 million and a non-GAAP earnings per share rise of 39% to $0.28. The company also reported $14.5 million in cash flow from operations, highlighting operational resilience. Cloud ARR growth accelerated from 19% to 21% year-over-year, reaching $85 million, while total ARR rose 8% to $235 million. The company's gross margin remained robust at 82.2%, and operating income increased by over 50% to $9.5 million. Additionally, Radware's adjusted EBITDA for Q2 2025 grew 37% to $11.4 million, with the core business achieving a 19% EBITDA margin. Looking ahead, Radware anticipates Q3 2025 revenue to be between $74.5 million and $75.5 million, with non-GAAP diluted EPS ranging from $0.26 to $0.27. The company continues to focus on scaling cloud ARR growth and expanding its AI-driven capabilities to foster long-term growth opportunities.Radware Financial Statement Overview
Summary
Radware demonstrates a strong financial position with solid revenue growth and operational efficiency. The company has improved its profitability margins and cash flow ratios, indicating a positive outlook despite historical challenges.Income Statement
Radware's TTM (Trailing-Twelve-Months) revenue grew by 5.06% from the previous annual period, indicating solid top-line growth. The gross profit margin stands at 80.71%, reflecting excellent cost management and operational efficiency. However, the net profit margin of 4.91% reveals moderate profitability, suggesting room for improvement. EBIT and EBITDA margins have improved from negative to 1.90% and 7.24%, respectively, indicating a turnaround from past losses.68
Positive
Balance Sheet
The company maintains a robust balance sheet with a low debt-to-equity ratio of 0.05, highlighting conservative leverage practices. The equity ratio is strong at 51.42%, indicating reliance on equity financing. Return on Equity (ROE) has improved to 4.18%, showing better utilization of shareholder equity compared to previous losses.75
Positive
Cash Flow
Radware's free cash flow growth is negative, declining from the previous period, yet the company generates substantial operating cash flow. The operating cash flow to net income ratio is 4.56, demonstrating strong cash conversion efficiency. The free cash flow to net income ratio is 4.12, indicating efficient cash generation relative to earnings.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 288.81M | 274.88M | 261.29M | 293.43M | 286.50M | 250.03M |
| Gross Profit | 233.12M | 221.63M | 209.58M | 239.54M | 234.05M | 204.94M |
| EBITDA | 20.89M | 7.95M | -19.44M | 8.35M | 28.42M | 16.73M |
| Net Income | 14.16M | 6.04M | -21.59M | -166.00K | 7.81M | 9.64M |
Balance Sheet | ||||||
| Total Assets | 658.54M | 618.68M | 571.92M | 643.59M | 635.37M | 623.26M |
| Cash, Cash Equivalents and Short-Term Investments | 273.51M | 275.78M | 330.59M | 298.04M | 287.89M | 310.49M |
| Total Debt | 17.72M | 18.27M | 20.70M | 24.15M | 27.45M | 30.07M |
| Total Liabilities | 278.80M | 261.60M | 248.64M | 275.14M | 265.38M | 234.80M |
| Stockholders Equity | 338.57M | 316.27M | 284.09M | 332.16M | 369.99M | 388.46M |
Cash Flow | ||||||
| Free Cash Flow | 58.31M | 66.33M | -8.93M | 23.33M | 66.17M | 53.14M |
| Operating Cash Flow | 64.57M | 71.61M | -3.50M | 32.15M | 71.77M | 61.81M |
| Investing Cash Flow | -44.32M | -39.52M | 92.78M | -56.02M | 7.85M | -14.37M |
| Financing Cash Flow | -3.21M | -3.91M | -64.93M | -22.46M | -41.88M | -33.42M |
Radware Technical Analysis
Positive
27.56
Price Trends
26.14
Positive
25.87
Positive
24.08
Positive
Market Momentum
0.33
Negative
66.55
Neutral
87.29
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 27.56 is above the 20-day moving average (MA) of 25.69, above the 50-day MA of 26.14, and above the 200-day MA of 24.08, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 66.55 is Neutral, neither overbought nor oversold. The STOCH value of 87.29 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 1.32B | 26.56 | 25.01% | 1.31% | 11.04% | 18.70% | |
72 Outperform | 10.99B | 27.19 | 9.50% | ― | 3.98% | -31.18% | |
69 Neutral | 1.87B | 25.95 | 4.70% | ― | 5.29% | 0.00% | |
66 Neutral | $1.17B | 85.38 | 4.46% | ― | 11.51% | ― | |
62 Neutral | 1.22B | 30.78 | 4.61% | ― | -2.32% | 7.70% | |
51 Neutral | 621.70M | -136.93 | -6.08% | ― | 0.00% | 0.00% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
RDWR
Radware
27.56
5.82
26.77%
AKAM
Akamai
76.68
-24.04
-23.87%
NTCT
Netscout Systems
25.97
4.80
22.67%
VRNT
Verint Systems
20.29
-4.62
-18.55%
ATEN
A10 Networks
18.33
4.72
34.68%
CGNT
Cognyte Software
8.64
2.04
30.91%
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.