Radware Ltd. (NASDAQ:RDWR) Released Earnings Last Week And Analysts Lifted Their Price Target To US$21.43

It's been a pretty great week for Radware Ltd. (NASDAQ:RDWR) shareholders, with its shares surging 20% to US$22.26 in the week since its latest quarterly results. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Radware after the latest results.

See our latest analysis for Radware

Taking into account the latest results, the most recent consensus for Radware from four analysts is for revenues of US$271.2m in 2024. If met, it would imply a credible 4.7% increase on its revenue over the past 12 months. Per-share statutory losses are expected to explode, reaching US$0.10 per share. In the lead-up to this report, the analysts had been modelling revenues of US$264.4m and earnings per share (EPS) of US$0.02 in 2024. Yet despite a small increase to revenues, the analysts are now forecasting a loss instead of a profit, which looks like a reduction in sentiment after the latest results.

It will come as a surprise to learn that the consensus price target rose 7.7% to US$21.43, with the analysts clearly more interested in growing revenue, even as losses intensify. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Radware analyst has a price target of US$23.00 per share, while the most pessimistic values it at US$19.29. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Radware's past performance and to peers in the same industry. The analysts are definitely expecting Radware's growth to accelerate, with the forecast 9.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. So it's clear that despite the acceleration in growth, Radware is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts are expecting Radware to become unprofitable next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Radware going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Radware's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com