RADWARE LTD (RDWR) Stock Fundamental Analysis
NASDAQ:RDWR - Nasdaq - IL0010834765 - Common Stock - Currency: USD
RDWR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 283 industry peers in the Software industry. RDWR is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. RDWR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year RDWR was profitable.
In the past year RDWR had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: RDWR reported negative net income in multiple years.
Of the past 5 years RDWR 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of RDWR (2.15%) is better than 67.84% of its industry peers.
With a decent Return On Equity value of 4.18%, RDWR is doing good in the industry, outperforming 69.96% of the companies in the same industry.
RDWR has a Return On Invested Capital of 0.99%. This is in the better half of the industry: RDWR outperforms 63.96% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 4.18% | ||
| ROIC | 0.99% |
ROA(3y)-0.94%
ROA(5y)-0.01%
ROE(3y)-1.92%
ROE(5y)-0.23%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
RDWR has a Profit Margin of 4.90%. This is in the better half of the industry: RDWR outperforms 69.61% of its industry peers.
RDWR's Profit Margin has declined in the last couple of years.
RDWR has a Operating Margin of 2.05%. This is in the better half of the industry: RDWR outperforms 65.37% of its industry peers.
RDWR has a better Gross Margin (80.72%) than 82.33% of its industry peers.
In the last couple of years the Gross Margin of RDWR has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.05% | ||
| PM (TTM) | 4.9% | ||
| GM | 80.72% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-6.9%
PM growth 5Y-24.52%
GM growth 3Y-0.44%
GM growth 5Y-0.35%
2. Health
2.1 Basic Checks
RDWR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, RDWR has more shares outstanding
The number of shares outstanding for RDWR has been reduced compared to 5 years ago.
There is no outstanding debt for RDWR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 3.00 indicates that RDWR is not in any danger for bankruptcy at the moment.
RDWR has a Altman-Z score of 3.00. This is comparable to the rest of the industry: RDWR outperforms 59.01% of its industry peers.
There is no outstanding debt for RDWR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 3 |
ROIC/WACC0.11
WACC9.08%
2.3 Liquidity
A Current Ratio of 1.75 indicates that RDWR should not have too much problems paying its short term obligations.
RDWR has a Current ratio of 1.75. This is comparable to the rest of the industry: RDWR outperforms 54.77% of its industry peers.
A Quick Ratio of 1.68 indicates that RDWR should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.68, RDWR is in line with its industry, outperforming 52.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.68 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 87.50% over the past year.
Measured over the past 5 years, RDWR shows a small growth in Earnings Per Share. The EPS has been growing by 0.47% on average per year.
RDWR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.51%.
The Revenue has been growing slightly by 1.75% on average over the past years.
EPS 1Y (TTM)87.5%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%40%
Revenue 1Y (TTM)11.51%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%10.31%
3.2 Future
RDWR is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.11% yearly.
The Revenue is expected to grow by 9.42% on average over the next years. This is quite good.
EPS Next Y25.09%
EPS Next 2Y14.83%
EPS Next 3Y13.11%
EPS Next 5YN/A
Revenue Next Year9.23%
Revenue Next 2Y8.07%
Revenue Next 3Y8.59%
Revenue Next 5Y9.42%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.68, RDWR is valued on the expensive side.
Based on the Price/Earnings ratio, RDWR is valued a bit cheaper than the industry average as 71.73% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.76. RDWR is around the same levels.
A Price/Forward Earnings ratio of 21.92 indicates a rather expensive valuation of RDWR.
RDWR's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RDWR is cheaper than 73.14% of the companies in the same industry.
RDWR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.91.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.68 | ||
| Fwd PE | 21.92 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDWR is valued a bit cheaper than the industry average as 69.96% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RDWR indicates a rather cheap valuation: RDWR is cheaper than 82.69% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.25 | ||
| EV/EBITDA | 34.7 |
4.3 Compensation for Growth
RDWR's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
RDWR's earnings are expected to grow with 13.11% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.94
PEG (5Y)50.19
EPS Next 2Y14.83%
EPS Next 3Y13.11%
5. Dividend
5.1 Amount
RDWR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
24.86
+0.27 (+1.1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners80.42%
Inst Owner Change3.01%
Ins Owners11.71%
Ins Owner ChangeN/A
Market Cap1.06B
Analysts80
Price Target30.99 (24.66%)
Short Float %2.37%
Short Ratio2.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)9.84%
Min EPS beat(2)4.25%
Max EPS beat(2)15.43%
EPS beat(4)4
Avg EPS beat(4)11.35%
Min EPS beat(4)4.25%
Max EPS beat(4)15.43%
EPS beat(8)7
Avg EPS beat(8)10.57%
EPS beat(12)7
Avg EPS beat(12)3.74%
EPS beat(16)10
Avg EPS beat(16)3.79%
Revenue beat(2)1
Avg Revenue beat(2)-0.42%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)0.19%
Revenue beat(4)2
Avg Revenue beat(4)-0.22%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)0.29%
Revenue beat(8)3
Avg Revenue beat(8)-0.46%
Revenue beat(12)3
Avg Revenue beat(12)-2.01%
Revenue beat(16)4
Avg Revenue beat(16)-1.7%
PT rev (1m)14.62%
PT rev (3m)16.08%
EPS NQ rev (1m)7.4%
EPS NQ rev (3m)8.94%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.74%
Revenue NQ rev (3m)0.99%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.68 | ||
| Fwd PE | 21.92 | ||
| P/S | 3.67 | ||
| P/FCF | 18.25 | ||
| P/OCF | 16.48 | ||
| P/B | 3.13 | ||
| P/tB | 4.07 | ||
| EV/EBITDA | 34.7 |
EPS(TTM)1.05
EY4.22%
EPS(NY)1.13
Fwd EY4.56%
FCF(TTM)1.36
FCFY5.48%
OCF(TTM)1.51
OCFY6.07%
SpS6.77
BVpS7.93
TBVpS6.11
PEG (NY)0.94
PEG (5Y)50.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 4.18% | ||
| ROCE | 1.25% | ||
| ROIC | 0.99% | ||
| ROICexc | 2.34% | ||
| ROICexgc | 3.82% | ||
| OM | 2.05% | ||
| PM (TTM) | 4.9% | ||
| GM | 80.72% | ||
| FCFM | 20.13% |
ROA(3y)-0.94%
ROA(5y)-0.01%
ROE(3y)-1.92%
ROE(5y)-0.23%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y-6.9%
PM growth 5Y-24.52%
GM growth 3Y-0.44%
GM growth 5Y-0.35%
F-Score7
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 52.54% | ||
| Cap/Sales | 2.16% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 361.48% | ||
| Profit Quality | 410.59% | ||
| Current Ratio | 1.75 | ||
| Quick Ratio | 1.68 | ||
| Altman-Z | 3 |
F-Score7
WACC9.08%
ROIC/WACC0.11
Cap/Depr(3y)140.31%
Cap/Depr(5y)111.59%
Cap/Sales(3y)5.74%
Cap/Sales(5y)4.53%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)87.5%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%40%
EPS Next Y25.09%
EPS Next 2Y14.83%
EPS Next 3Y13.11%
EPS Next 5YN/A
Revenue 1Y (TTM)11.51%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%10.31%
Revenue Next Year9.23%
Revenue Next 2Y8.07%
Revenue Next 3Y8.59%
Revenue Next 5Y9.42%
EBIT growth 1Y130.19%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year160.98%
EBIT Next 3Y53.57%
EBIT Next 5Y29.36%
FCF growth 1Y725.97%
FCF growth 3Y0.08%
FCF growth 5Y8.22%
OCF growth 1Y337.74%
OCF growth 3Y-0.07%
OCF growth 5Y6.26%