Radware, Ltd

Radware (RDWR - Snapshot Report) is coming off of a record-setting quarter and estimates are on the rise. It is also the top rated company in its peer group, so is now a good time to get into this Zacks #1 Rank (Strong Buy)?

Company Description

Radware offers network security and delivery solutions for virtual and cloud data centers. Customers include banks, government agencies, and other entities worldwide.

Record-Setting Quarter

On Oct 26 Radware reported $42.2 million in quarterly revenue, a 15% year-over-year increase and a company record. Additionally, records were set for earnings per share and operating margins.

EPS came in at $0.28, a penny better than expected to give RDWR its fourth surprise in the past 6 quarters.

Rising Estimates

There is only 1 analyst polled by Zacks but his estimates are moving higher. This year's forecast is at $1.08, up 3 cents on the earnings news.

Next year's projection is up 9 cents, to $1.34. Radware earned $0.63 per share last year, so the expected growth rates are currently 71% and 24%, respectively.

Valuations & Comparisons

Shares of RDWR are going for 24 times this year's estimate and with a long-term growth rate of 20%, the PEG is at 1.2. So, the growth is at a reasonable price.

Radware is the top rated internet software company, out of 22, on Zacks.com. With a net profit margin at 11.6%, compared to the industry average or 2.0%, and an ROE at 11.4%, more than twice the peer average, it is easy to see why.

The Chart

Shares were up a bit on the earnings news and have held onto the new level. Right now though, shares are looking a bit oversold which could draw some attention from new buyers.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service

Read the full analyst report on RDWR