Is Radware (RDWR) Fully Valued Following Q2 Results And Q3 Revenue Guidance?

Q2 results highlight revenue growth and lower profitability

Radware (NasdaqGS:RDWR) drew investor focus after reporting second quarter 2026 results on 29 July, with higher sales than a year earlier and lower net income, alongside fresh revenue guidance for the third quarter.

The company reported Q2 sales of US$82.28 million, compared with US$74.11 million for the same period in 2025. Net income for the quarter was US$1.71 million, compared with US$4.22 million a year earlier.

Basic earnings per share from continuing operations were US$0.09, compared with US$0.15 in the prior year quarter. Diluted earnings per share from continuing operations were also US$0.09, compared with US$0.14 a year earlier.

Total basic earnings per share were US$0.04, compared with US$0.10 a year before. Total diluted earnings per share were US$0.04, compared with US$0.09 for the same period in 2025.

For the first six months of 2026, Radware reported sales of US$162.09 million, compared with US$146.13 million a year earlier. Net income for the period was US$5.26 million, compared with US$8.57 million for the first half of 2025.

Basic earnings per share from continuing operations for the six month period were US$0.23, compared with US$0.30 a year earlier. Diluted earnings per share from continuing operations were US$0.23, compared with US$0.29 for the same period in 2025.

Total basic earnings per share over the six months were US$0.12, compared with US$0.20 in the prior year period. Total diluted earnings per share were US$0.12, compared with US$0.19 a year earlier.

Alongside the Q2 release, Radware issued revenue guidance for the third quarter of 2026, expecting total revenue in a range between US$82.5 million and US$83.5 million. This range provides a reference point for investors tracking how demand for the company’s cyber security and application delivery solutions is evolving through the second half of the year.

See our latest analysis for Radware.

Radware shares trade at US$28.46 after a year in which the stock recorded a 19.68% year to date share price return and a 17.17% total shareholder return. Recent Q2 results and fresh Q3 guidance have helped shape expectations as momentum has softened over the past month but remains positive over three years.

If Radware’s update has you thinking about where else growth and valuation stories might be shifting, now can be a good time to review 56 AI infrastructure stocks

Recent share price gains and the softer month of trading both tie back to Radware’s mix of growing sales and thinner margins. Are investors mainly reacting to the business trend or to shifting sentiment around the stock’s valuation?

Price-to-Earnings of 69.4x: Is it justified?

Radware currently trades on a P/E of 69.4x, which puts a clear premium on the stock compared with both peers and the broader US software sector.

The P/E multiple reflects how much investors are paying today for each dollar of Radware earnings. For a cyber security and application delivery company with a track record of 16% annual earnings growth over the past five years and higher net profit margins than a year ago, a higher multiple can signal that the market is willing to pay up for that profit profile.

However, the gap is wide. Radware’s 69.4x P/E is well above the peer average of 27.8x and the US software industry average of 32.5x. With the stock also trading above an SWS DCF estimate of future cash flow value of $19.64 per share, the current pricing suggests investors are paying a steep premium relative to both peers and a cash flow based valuation anchor.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Preferred multiple of Price-to-Earnings of 69.4x (OVERVALUED)

However, Radware’s high P/E and thinner recent profitability leave the narrative exposed if earnings soften further or if sector sentiment cools from current levels.

Find out about the key risks to this Radware narrative.

Another view on Radware using the SWS DCF model

The P/E of 69.4x paints Radware as expensive relative to peers, yet the SWS DCF model also points to an even richer picture. With the share price at $28.46 and a future cash flow value estimate of $19.64, the stock screens as overvalued on both lenses. Which one do you trust more when earnings momentum changes?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Radware for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 52 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mixed signals around Radware, it can help to look past the headline metrics and review the full picture yourself. To see how the balance of concerns and potential upsides stacks up in detail, start with the 1 key reward and 2 important warning signs.

Looking for more investment ideas beyond Radware?

Radware’s latest results can be a useful benchmark, but your next opportunity might be sitting elsewhere. Use these focused stock lists to widen your net intelligently.

• Target stability and potential value by reviewing companies screened as resilient, low risk choices through the 83 resilient stocks with low risk scores.
• Spot potential bargains by checking companies that pair quality fundamentals with attractive pricing using the 52 high quality undervalued stocks.
• Strengthen your income focus by scanning for higher yielding companies grouped in the 8 dividend fortresses.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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