What Does Radware Ltd.'s (NASDAQ:RDWR) Share Price Indicate?

Radware Ltd. (NASDAQ:RDWR), which is in the communications business, and is based in Israel, saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$26.60 and falling to the lows of US$22.26. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Radware's current trading price of US$23.90 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Radware’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Radware

What's the opportunity in Radware?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16.46% above my intrinsic value, which means if you buy Radware today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $20.52, there’s only an insignificant downside when the price falls to its real value. Furthermore, Radware’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Radware generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Radware’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? RDWR’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on RDWR, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Radware. You can find everything you need to know about Radware in the latest infographic research report. If you are no longer interested in Radware, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.