• Radware Ltd. recently reported strong third-quarter earnings, with revenue rising to US$75.31 million and net income increasing to US$5.65 million compared to the same period last year.
• An interesting highlight was the company's 24% year-over-year growth in cloud annual recurring revenue, reflecting sustained demand for its AI-powered security offerings.
• We’ll look at how Radware’s accelerated cloud revenue growth shapes its broader investment narrative in security technology.

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What Is Radware's Investment Narrative?

To believe in Radware as a potential investment, you have to be convinced by its renewed momentum in cloud-focused security and the promise behind its AI-powered offerings, evidenced by the latest results. This quarter’s earnings update showed higher revenue and net income, along with a substantial 24% jump in cloud annual recurring revenue, a clear signal of relevance in high-demand areas of cybersecurity. For the short term, this cloud growth is the biggest catalyst, potentially boosting both visibility and recurring revenues, particularly after Radware exceeded its Q3 revenue expectations. However, key risks remain. The stock still trades at a premium to both peers and the broader software sector, and a large one-off gain influenced past results, raising questions about the quality of earnings. Regional variability such as bright spots in the Americas but declines in EMEA is also a factor. Overall, the recent news helps strengthen the near-term growth story, but valuation and earnings consistency are issues investors can’t ignore. Yet, reliance on one-off gains in profits is a concern investors should note.

Radware's share price has been on the slide but might be up to 20% below fair value. Find out if it's a bargain.

Exploring Other Perspectives

Six distinct fair value estimates from the Simply Wall St Community stretch from US$14.53 up to US$32.78 per share. While this covers both potential upside and downside, the premium valuation in analyst research, and past reliance on exceptional items, reminds you to weigh risks as well as growth stories. Consider exploring these different perspectives to inform your outlook.

Explore 6 other fair value estimates on Radware - why the stock might be worth as much as 28% more than the current price!

Build Your Own Radware Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Radware research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Radware research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Radware's overall financial health at a glance.

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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.