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 second-quarter results. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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.
After the latest results, the four analysts covering Radware are now predicting revenues of US$271.2m in 2024. If met, this would reflect a modest 4.7% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 66% to US$0.10 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$264.4m and earnings per share (EPS) of US$0.02 in 2024. While they've upgraded their revenue numbers for next year, the consensus also expects losses to increase, perhaps due to the investments required to fund that growth In any event, it's not clear that these new estimates are particularly bullish.
The average price target rose 7.7% to US$21.43, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Radware, with the most bullish analyst valuing it at US$23.00 and the most bearish at US$19.29 per share. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Radware's rate of growth is expected to accelerate meaningfully, with the forecast 9.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Radware is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting Radware to become unprofitable next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. 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