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 282 industry peers in the Software industry. While RDWR has a great health rating, its profitability is only average at the moment. RDWR is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
RDWR had positive earnings in the past year.
RDWR had a positive operating cash flow in the past year.
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
RDWR has a Return On Assets of 1.80%. This is in the better half of the industry: RDWR outperforms 69.15% of its industry peers.
RDWR's Return On Equity of 3.57% is fine compared to the rest of the industry. RDWR outperforms 70.57% of its industry peers.
With a decent Return On Invested Capital value of 0.34%, RDWR is doing good in the industry, outperforming 63.12% of the companies in the same industry.
| 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
With a decent Profit Margin value of 4.12%, RDWR is doing good in the industry, outperforming 71.28% of the companies in the same industry.
RDWR's Profit Margin has declined in the last couple of years.
RDWR has a better Operating Margin (0.70%) than 63.48% of its industry peers.
RDWR has a Gross Margin of 80.69%. This is amongst the best in 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
RDWR has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
RDWR has more shares outstanding than it did 1 year ago.
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
RDWR has an Altman-Z score of 3.46. This indicates that RDWR is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.46, RDWR is in the better half of the industry, outperforming 60.64% 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 | 3.46 |
ROIC/WACC0.03
WACC9.81%
2.3 Liquidity
A Current Ratio of 1.85 indicates that RDWR should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.85, RDWR is in line with its industry, outperforming 57.09% 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 has a Quick ratio (1.78) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.85 | ||
| Quick Ratio | 1.78 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 110.87% over the past year.
RDWR shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.47% yearly.
Looking at the last year, RDWR shows a quite strong growth in Revenue. The Revenue has grown by 9.53% in the last year.
Measured over the past years, RDWR shows a small growth in Revenue. The Revenue has been growing by 1.75% on average per year.
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.
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 Year8.82%
Revenue Next 2Y7.98%
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
A Price/Earnings ratio of 31.43 indicates a quite expensive valuation of RDWR.
Based on the Price/Earnings ratio, RDWR is valued a bit cheaper than the industry average as 70.57% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of RDWR to the average of the S&P500 Index (27.45), we can say RDWR is valued inline with the index average.
With a Price/Forward Earnings ratio of 26.89, RDWR can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RDWR indicates a somewhat cheap valuation: RDWR is cheaper than 68.79% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. RDWR is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.43 | ||
| Fwd PE | 26.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RDWR is valued a bit cheaper than the industry average as 62.41% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, RDWR is valued cheaper than 83.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.05 | ||
| EV/EBITDA | 59.36 |
4.3 Compensation for Growth
RDWR's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as RDWR's earnings are expected to grow with 13.11% in the coming years.
PEG (NY)1.25
PEG (5Y)66.63
EPS Next 2Y14.83%
EPS Next 3Y13.11%
5. Dividend
5.1 Amount
No dividends for RDWR!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
30.49
+0.81 (+2.73%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners76.74%
Inst Owner Change3.05%
Ins Owners11.71%
Ins Owner ChangeN/A
Market Cap1.30B
Analysts78
Price Target27.03 (-11.35%)
Short Float %1.22%
Short Ratio1.58
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)1.27%
PT rev (3m)-1.24%
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%
Revenue NQ rev (3m)1.28%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.43 | ||
| Fwd PE | 26.89 | ||
| P/S | 4.62 | ||
| P/FCF | 19.05 | ||
| P/OCF | 17.85 | ||
| P/B | 4 | ||
| P/tB | 5.28 | ||
| EV/EBITDA | 59.36 |
EPS(TTM)0.97
EY3.18%
EPS(NY)1.13
Fwd EY3.72%
FCF(TTM)1.6
FCFY5.25%
OCF(TTM)1.71
OCFY5.6%
SpS6.6
BVpS7.61
TBVpS5.77
PEG (NY)1.25
PEG (5Y)66.63
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 | 3.46 |
F-Score6
WACC9.81%
ROIC/WACC0.03
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 Year8.82%
Revenue Next 2Y7.98%
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%