RADWARE LTD (RDWR) Stock Fundamental Analysis
NASDAQ:RDWR - Nasdaq - IL0010834765 - Common Stock - Currency: USD
Taking everything into account, RDWR scores 5 out of 10 in our fundamental rating. RDWR was compared to 282 industry peers in the Software industry. RDWR has an excellent financial health rating, but there are some minor concerns on its profitability. RDWR has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
RDWR had positive earnings in the past year.
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
With a decent Return On Assets value of 1.80%, RDWR is doing good in the industry, outperforming 69.15% of the companies in the same industry.
Looking at the Return On Equity, with a value of 3.57%, RDWR is in the better half of the industry, outperforming 70.57% of the companies in the same industry.
RDWR has a Return On Invested Capital of 0.34%. This is in the better half of the industry: RDWR outperforms 62.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.8% | ||
| ROE | 3.57% | ||
| ROIC | 0.34% |
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's Profit Margin of 4.12% is fine compared to the rest of the industry. RDWR outperforms 71.28% of its industry peers.
RDWR's Profit Margin has declined in the last couple of years.
RDWR has a better Operating Margin (0.70%) than 62.77% of its industry peers.
RDWR's Gross Margin of 80.69% is amongst the best of the industry. RDWR outperforms 82.62% 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 | 0.7% | ||
| PM (TTM) | 4.12% | ||
| GM | 80.69% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), RDWR is destroying value.
Compared to 1 year ago, RDWR has more shares outstanding
Compared to 5 years ago, RDWR has less shares outstanding
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 3.35 indicates that RDWR is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.35, RDWR is in line with its industry, outperforming 59.22% of the companies in the same industry.
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 | 3.35 |
ROIC/WACC0.04
WACC9.57%
2.3 Liquidity
A Current Ratio of 1.85 indicates that RDWR should not have too much problems paying its short term obligations.
With a Current ratio value of 1.85, RDWR perfoms like the industry average, outperforming 57.45% of the companies in the same industry.
A Quick Ratio of 1.78 indicates that RDWR should not have too much problems paying its short term obligations.
RDWR's Quick ratio of 1.78 is in line compared to the rest of the industry. RDWR outperforms 56.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.78 |
3. Growth
3.1 Past
RDWR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 110.87%, which is quite impressive.
RDWR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.47% yearly.
RDWR shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.53%.
RDWR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.75% yearly.
EPS 1Y (TTM)110.87%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%68.75%
Revenue 1Y (TTM)9.53%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%10.75%
3.2 Future
Based on estimates for the next years, RDWR will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.11% on average per year.
Based on estimates for the next years, RDWR will show a quite strong growth in Revenue. The Revenue will grow by 9.42% on average per year.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 30.71, which means the current valuation is very expensive for RDWR.
RDWR's Price/Earnings ratio is a bit cheaper when compared to the industry. RDWR is cheaper than 70.92% of the companies in the same industry.
RDWR's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.46.
Based on the Price/Forward Earnings ratio of 26.27, the valuation of RDWR can be described as expensive.
Based on the Price/Forward Earnings ratio, RDWR is valued a bit cheaper than 69.86% of the companies in the same industry.
RDWR is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.71 | ||
| Fwd PE | 26.27 |
4.2 Price Multiples
RDWR's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. RDWR is cheaper than 63.48% of the companies in the same industry.
85.11% of the companies in the same industry are more expensive than RDWR, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.62 | ||
| EV/EBITDA | 55.34 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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)1.22
PEG (5Y)65.11
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 |
29.79
+0.62 (+2.13%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners76.74%
Inst Owner Change0.02%
Ins Owners11.71%
Ins Owner ChangeN/A
Market Cap1.27B
Analysts78
Price Target29.2 (-1.98%)
Short Float %2.98%
Short Ratio3.75
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)13.5%
Min EPS beat(2)11.57%
Max EPS beat(2)15.43%
EPS beat(4)4
Avg EPS beat(4)15.74%
Min EPS beat(4)11.57%
Max EPS beat(4)21.79%
EPS beat(8)6
Avg EPS beat(8)6.61%
EPS beat(12)6
Avg EPS beat(12)2.57%
EPS beat(16)10
Avg EPS beat(16)4.89%
Revenue beat(2)2
Avg Revenue beat(2)0.24%
Min Revenue beat(2)0.19%
Max Revenue beat(2)0.29%
Revenue beat(4)2
Avg Revenue beat(4)0%
Min Revenue beat(4)-0.34%
Max Revenue beat(4)0.29%
Revenue beat(8)3
Avg Revenue beat(8)-1.19%
Revenue beat(12)3
Avg Revenue beat(12)-2.14%
Revenue beat(16)5
Avg Revenue beat(16)-1.43%
PT rev (1m)8.01%
PT rev (3m)9.39%
EPS NQ rev (1m)0%
EPS NQ rev (3m)10.64%
EPS NY rev (1m)0%
EPS NY rev (3m)5.71%
Revenue NQ rev (1m)0.22%
Revenue NQ rev (3m)1.51%
Revenue NY rev (1m)0.38%
Revenue NY rev (3m)1.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.71 | ||
| Fwd PE | 26.27 | ||
| P/S | 4.51 | ||
| P/FCF | 18.62 | ||
| P/OCF | 17.44 | ||
| P/B | 3.91 | ||
| P/tB | 5.16 | ||
| EV/EBITDA | 55.34 |
EPS(TTM)0.97
EY3.26%
EPS(NY)1.13
Fwd EY3.81%
FCF(TTM)1.6
FCFY5.37%
OCF(TTM)1.71
OCFY5.73%
SpS6.6
BVpS7.61
TBVpS5.77
PEG (NY)1.22
PEG (5Y)65.11
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.8% | ||
| ROE | 3.57% | ||
| ROCE | 0.43% | ||
| ROIC | 0.34% | ||
| ROICexc | 0.92% | ||
| ROICexgc | 1.7% | ||
| OM | 0.7% | ||
| PM (TTM) | 4.12% | ||
| GM | 80.69% | ||
| FCFM | 24.23% |
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-Score6
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 38.33% | ||
| Cap/Sales | 1.64% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 520.03% | ||
| Profit Quality | 588.69% | ||
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.78 | ||
| Altman-Z | 3.35 |
F-Score6
WACC9.57%
ROIC/WACC0.04
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)110.87%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%68.75%
EPS Next Y25.09%
EPS Next 2Y14.83%
EPS Next 3Y13.11%
EPS Next 5YN/A
Revenue 1Y (TTM)9.53%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%10.75%
Revenue Next Year9.23%
Revenue Next 2Y8.07%
Revenue Next 3Y8.59%
Revenue Next 5Y9.42%
EBIT growth 1Y107.45%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year160.98%
EBIT Next 3Y48.91%
EBIT Next 5Y29.36%
FCF growth 1Y107.38%
FCF growth 3Y0.08%
FCF growth 5Y8.22%
OCF growth 1Y76.33%
OCF growth 3Y-0.07%
OCF growth 5Y6.26%