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Radware (RDWR) Q3 Earnings Leave Stock Facing A Valuation Reality Check

Simply Wall St · 2d ago

Radware just reported Q3 2026 and the market barely flinched. The stock slipped about 1.4% on the first trading day after the release, a muted move for a cyber security vendor that posted a record US$84.4 million in quarterly revenue and US$107 million in cloud annual recurring revenue.

Investors appear more cautious than euphoric. A rich P/E multiple near 114x meets a story built around recurring security spend and strong cloud traction. As a result, the small pullback looks less like panic and more like a sentiment check on how much of this earnings strength was already priced in.

At Radware, recurring cloud security spend is clearly the draw, while a triple digit P/E ratio keeps many investors on edge. If you like the stability of Radware’s cloud ARR but are concerned about paying up for that 114x P/E multiple, explore 30 resilient stocks with low risk scores.

Q3 2026 Earnings Summary

  • Revenue (Q3 2026 vs. Q3 2025): US$84.4 million vs. US$75.3 million (up about 12%)
  • Net Income from Continuing Operations (Trailing 12 Months to Q3 2026 vs. Trailing 12 Months to Q3 2025): US$13.5 million vs. US$16.7 million (decline in earnings and margin)
  • Basic EPS (Q3 2026 vs. Q3 2025): US$0.109 vs. US$0.132 (down for the quarter year on year)
  • Cloud Annual Recurring Revenue, ARR (Q3 2026 vs. Q3 2025): US$107 million vs. about US$88 million (up about 21%)

Cloud ARR jumped 21% and now makes up 41% of Radware’s ARR. Ask Charlie what’s driving Radware’s cloud ARR surge.

NasdaqGS:RDWR Trailing 12-Month Revenue & Expenses Breakdown as at Oct 2026
NasdaqGS:RDWR Trailing 12-Month Revenue & Expenses Breakdown as at Oct 2026

Radware’s Cloud And ARR Story Holds Up

For a bullish angle, the core Radware narrative still lines up with the figures. Top line rose to a record US$84.4 million and total ARR of about US$266 million points to a heavier recurring mix. Cloud ARR at US$107 million with a higher share of total ARR fits the idea of a security platform that is steadily shifting toward subscription revenue. The seven year DDoS deal with a major cloud provider and third party recognition in WAF and API security reinforce that the business is winning where its story is strongest.

Profitability And FX Keep The Bear Case Alive

Bears will focus on earnings quality. Trailing 12 month net income from continuing operations slipped to US$13.5 million from US$16.7 million while basic EPS dipped year on year. Management flagged Israeli shekel appreciation and product mix as pressures on operating income and gross margin. That FX drag is real for reported profit even if demand looks healthy. The stock’s mild 1.4% pullback after earnings suggests investors are weighing those profit headwinds against strong ARR and cloud traction rather than treating this as a clean win for Radware’s equity story.

FX pressure, a 114x P/E and softer trailing earnings can mask deeper issues in how Radware converts demand into durable profit. Review the risk analysis for Radware which shows 2 important warning signs

Hunt Quiet Disconnects In Plain Sight

Radware just showed how a strong recurring story can coexist with a cautious share price. The real opportunity is finding stocks that could be undervalued before the market corrects them.

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