How High Can Radware Fly?

Shares of Radware (Nasdaq: RDWR  ) hit a 52-week high recently. Let's look at how it got here and whether clear skies are ahead.

How it got here
Many networking infrastructure plays have been raking it in from the migration to cloud computing, including Radware and its application delivery and network security offerings.

The Israel-based company reported fourth quarter earnings just two months ago. Radware reported record quarterly revenue of $45.1 million, a 15% increase over the prior year. Full-year sales grew 16% to $167 million. Non-GAAP earnings per share for the quarter came in at $0.42. The bottom line was ahead of the Street consensus, which called for $0.36 per share in profit.

Fellow application delivery specialist F5 Networks (Nasdaq: FFIV  ) just reported its latest quarter, delivering strong results that spelled good news as the clear leader within the sector.

How it stacks up
Let's see how it stacks up with other networking peers.

RDWR Chart

RDWR data by YCharts.

Let's include some fundamental metrics in the mix.

Company

P/E (TTM)

Sales Growth (5-Year Rate)

Net margin (TTM)

ROE (TTM)

Radware 41.1 15.5% 12.8% 10.6%
F5 Networks 39.6 23.9% 20.9% 22.8%
Cisco Systems (Nasdaq: CSCO  ) 15.2 8.7% 15.6% 14.8%
Juniper Networks (Nasdaq: JNPR  ) 36.1 14.1% 7.1% 4.4%

Source: Reuters. TTM = trailing 12 months.

Of the bunch, F5 stands out as the clear leader in terms of share performance, growth, profitability, and return on equity. The company claims roughly half of the application delivery market, partially at the expense of slow-moving goliath Cisco.

Juniper just reported earnings, and it continues to face some uncertainties with spending from telecom customers while Cisco kicks up the competition there. On top of that, it already carries a loftier valuation while being the least profitable of the group.

Radware continues to chug along while growing its relatively smaller piece of the pie.

What's next
Radware is also preparing to announce its first-quarter results on Tuesday, and it may have good news considering F5's strong report. Analysts expect revenue to be about $44.2 million with earnings per share of $0.36. We'll see next week if Radware can justify its high P/E ratio.

Interested in more info on Radware? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Cisco Systems. The Motley Fool has a disclosure policy.

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