Radware Ltd. (RDWR): A Bull Case Theory

Ricardo Pillai

Tue, May 13, 2025, 7:51 AM 3 min read

We came across a bullish thesis on Radware Ltd. (RDWR) on Substack by Charly AI. In this article, we will summarize the bulls’ thesis on RDWR. Radware Ltd. (RDWR)'s share was trading at $22.07 as of May 9^th. RDWR’s trailing and forward P/E were 81.74 and 26.74 respectively according to Yahoo Finance.

A cybersecurity expert monitoring the security of the company's assets, emphasizing the importance of data protection.

Radware is a global leader in cybersecurity and application delivery solutions, serving cloud, on-premises, and software-defined data centers. It operates across two segments: Radware's Core Business and The Hawks' Business. The company provides a broad range of services, including cloud application protection, bot management, API protection, and DDoS mitigation, among others. Radware's solutions cater to critical cybersecurity needs, offering defense mechanisms like cloud WAF, threat intelligence, and firewall as-a-service to ensure robust protection against emerging cyber threats.

The company is witnessing strong momentum, with accelerating revenue growth driven by its shift towards recurring revenue streams, particularly in the cloud business. Cloud Annual Recurring Revenue (ARR) has grown 19% year-over-year, signaling the success of its transformation. This pivot to recurring revenues now accounts for 80% of total sales, providing Radware with a stable financial foundation. Alongside revenue growth, Radware has made significant strides in profitability, with non-GAAP earnings per share (EPS) doubling to $0.87 in 2024. The company’s operational cash flow has surged to $71.6 million, reflecting disciplined execution and efficient cost management. Radware's balance sheet is also exceptionally strong, with $420 million in cash and no significant debt, enabling it to navigate market uncertainties with flexibility.

Strategically, Radware is well-positioned to capitalize on the booming demand for cybersecurity solutions, particularly in AI-driven security and partnerships with industry giants like Cisco. This focus on high-growth areas like cloud security and its robust balance sheet bolster investor confidence. Although competition from larger players and geopolitical risks, particularly in Israel, present potential headwinds, Radware’s solid fundamentals and market positioning offer a strong counterbalance. The company’s 82.2% gross margins reflect operational efficiency, while its reasonable forward valuation, with a forward P/E ratio of 24.9, suggests that current market pricing is fair considering its growth potential.