Yahoo Finance Will Radware Ltd.'s (NASDAQ:RDWR) Earnings Grow Over The Next Few Years?
Radware Ltd.'s (NASDAQ:RDWR) most recent earnings announcement in December 2018 showed that the company turned profitable again after incurring losses in the previous financial year. Today I want to provide a brief commentary on how market analysts view Radware's earnings growth trajectory over the next few years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Check out our latest analysis for Radware
Market analysts' prospects for the coming year seems buoyant, with earnings increasing by a robust 19%. This growth in earnings is expected to continue at an exponential rate, bringing the bottom line up to US$46m by 2022.
While it is useful to understand the rate of growth each year relative to today’s figure, it may be more insightful analyzing the rate at which the earnings are rising or falling every year, on average. The benefit of this technique is that we can get a better picture of the direction of Radware's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 43%. This means that, we can assume Radware will grow its earnings by 43% every year for the next couple of years.
Next Steps:
For Radware, I've compiled three essential aspects you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is RDWR worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RDWR is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of RDWR? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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.
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. Thank you for reading.
