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. Both the profitability and the financial health of RDWR get a neutral evaluation. Nothing too spectacular is happening here. RDWR is not valued too expensively and it also shows a decent 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.
RDWR had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
RDWR has a better Return On Assets (0.98%) than 62.68% of its industry peers.
RDWR's Return On Equity of 1.91% is fine compared to the rest of the industry. RDWR outperforms 64.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.98% | ||
| ROE | 1.91% | ||
| ROIC | N/A |
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 2.20%. This is in the better half of the industry: RDWR outperforms 63.77% of its industry peers.
In the last couple of years the Profit Margin of RDWR has declined.
Looking at the Gross Margin, with a value of 80.63%, RDWR belongs to the top of the industry, outperforming 82.97% of the companies in the same industry.
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 | N/A | ||
| PM (TTM) | 2.2% | ||
| GM | 80.63% |
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 does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, RDWR has more shares outstanding
RDWR has less shares outstanding than it did 5 years ago.
RDWR has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.92 indicates that RDWR is not a great score, but indicates only limited risk for bankruptcy at the moment.
RDWR has a Altman-Z score (2.92) which is comparable to the rest of the 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 | 2.92 |
ROIC/WACCN/A
WACC9.11%
2.3 Liquidity
A Current Ratio of 1.90 indicates that RDWR should not have too much problems paying its short term obligations.
RDWR has a Current ratio of 1.90. This is comparable to the rest of the industry: RDWR outperforms 57.61% of its industry peers.
RDWR has a Quick Ratio of 1.82. This is a normal value and indicates that RDWR is financially healthy and should not expect problems in meeting its short term obligations.
RDWR has a Quick ratio of 1.82. This is comparable to the rest of the industry: RDWR outperforms 54.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.82 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 95.45% 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.
RDWR shows a small growth in Revenue. In the last year, the Revenue has grown by 5.20%.
The Revenue has been growing slightly by 1.75% on average over the past years.
EPS 1Y (TTM)95.45%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%107.69%
Revenue 1Y (TTM)5.2%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%12.3%
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 10.74% on average per year.
The Revenue is expected to grow by 8.76% on average over the next years. This is quite good.
EPS Next Y14.33%
EPS Next 2Y12.66%
EPS Next 3Y10.74%
EPS Next 5YN/A
Revenue Next Year7.55%
Revenue Next 2Y7.57%
Revenue Next 3Y8.76%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
Based on the Price/Earnings ratio of 26.67, the valuation of RDWR can be described as expensive.
Based on the Price/Earnings ratio, RDWR is valued a bit cheaper than the industry average as 73.91% of the companies are valued more expensively.
RDWR is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.62, which is the current average of the S&P500 Index.
RDWR is valuated rather expensively with a Price/Forward Earnings ratio of 23.33.
77.17% of the companies in the same industry are more expensive than RDWR, based on the Price/Forward Earnings ratio.
RDWR's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.70.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.67 | ||
| Fwd PE | 23.33 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RDWR indicates a somewhat cheap valuation: RDWR is cheaper than 65.22% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, RDWR is valued cheaply inside the industry as 91.30% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.52 | ||
| EV/EBITDA | 59.01 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)1.86
PEG (5Y)56.55
EPS Next 2Y12.66%
EPS Next 3Y10.74%
5. Dividend
5.1 Amount
RDWR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
22.94
-0.46 (-1.97%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners75.9%
Inst Owner Change-93.32%
Ins Owners10.93%
Ins Owner ChangeN/A
Market Cap963.25M
Analysts76.36
Price Target26.35 (14.86%)
Short Float %1.18%
Short Ratio3.32
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)12.87%
Min EPS beat(2)11.57%
Max EPS beat(2)14.17%
EPS beat(4)4
Avg EPS beat(4)16.48%
Min EPS beat(4)11.57%
Max EPS beat(4)21.79%
EPS beat(8)5
Avg EPS beat(8)4.35%
EPS beat(12)6
Avg EPS beat(12)1.82%
EPS beat(16)10
Avg EPS beat(16)4.89%
Revenue beat(2)1
Avg Revenue beat(2)-0.02%
Min Revenue beat(2)-0.34%
Max Revenue beat(2)0.29%
Revenue beat(4)2
Avg Revenue beat(4)0.1%
Min Revenue beat(4)-0.34%
Max Revenue beat(4)0.6%
Revenue beat(8)2
Avg Revenue beat(8)-1.88%
Revenue beat(12)2
Avg Revenue beat(12)-2.3%
Revenue beat(16)5
Avg Revenue beat(16)-1.36%
PT rev (1m)3.61%
PT rev (3m)3.61%
EPS NQ rev (1m)7.69%
EPS NQ rev (3m)15.91%
EPS NY rev (1m)3.1%
EPS NY rev (3m)3.1%
Revenue NQ rev (1m)1.67%
Revenue NQ rev (3m)2.28%
Revenue NY rev (1m)0.91%
Revenue NY rev (3m)0.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.67 | ||
| Fwd PE | 23.33 | ||
| P/S | 3.5 | ||
| P/FCF | 14.52 | ||
| P/OCF | 13.45 | ||
| P/B | 3.05 | ||
| P/tB | 4.07 | ||
| EV/EBITDA | 59.01 |
EPS(TTM)0.86
EY3.75%
EPS(NY)0.98
Fwd EY4.29%
FCF(TTM)1.58
FCFY6.89%
OCF(TTM)1.71
OCFY7.43%
SpS6.55
BVpS7.53
TBVpS5.63
PEG (NY)1.86
PEG (5Y)56.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.98% | ||
| ROE | 1.91% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | 2.2% | ||
| GM | 80.63% | ||
| FCFM | 24.13% |
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 | 44.6% | ||
| Cap/Sales | 1.92% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | 827.85% | ||
| Profit Quality | 1098.54% | ||
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.82 | ||
| Altman-Z | 2.92 |
F-Score7
WACC9.11%
ROIC/WACCN/A
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)95.45%
EPS 3Y2.02%
EPS 5Y0.47%
EPS Q2Q%107.69%
EPS Next Y14.33%
EPS Next 2Y12.66%
EPS Next 3Y10.74%
EPS Next 5YN/A
Revenue 1Y (TTM)5.2%
Revenue growth 3Y-1.37%
Revenue growth 5Y1.75%
Sales Q2Q%12.3%
Revenue Next Year7.55%
Revenue Next 2Y7.57%
Revenue Next 3Y8.76%
Revenue Next 5YN/A
EBIT growth 1Y88.9%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year123.43%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y842.86%
FCF growth 3Y0.08%
FCF growth 5Y8.22%
OCF growth 1Y2145.97%
OCF growth 3Y-0.07%
OCF growth 5Y6.26%