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Radware Ltd. (RDWR) Message Board

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  • sparklybarks sparklybarks Jul 31, 2000 6:45 PM Flag

    RDWR IS making money!

    It is a useful exercise to take out both interest
    and cash before calculating earnings. What is left
    shows you whether the company has a workable business
    model, and what kind of returns can be projected. If you
    want to make 7% pa you can put the money in your own


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    • to continue at the same rate as before, the
      corresponding figures for the same six months next year will be
      approx $40.8m sales, $34.4m margin. (I do like the GM).
      If you then project the same growth in expenses as
      before, you get $39.8m. This is a trading loss of $5.4m
      vs interest earned of about $2.5m, giving you a
      bottom line loss of $2.9m.

      I sold today at $32.
      I like RDWR and hold a number of Israeli High tech
      stocks. Currently however, I think there will be a "sell
      on the news", and taken together with a likely ugly
      patch on the Nasdaq, its my opinion that I'll be able
      to buy back in much lower in the next 2 weeks. Just
      my opinion. I'm not a short or a knocker, but I
      would like to get back in under my Jul 27 buy at $27,
      and if the market tanks, which I think is very
      likely, under my initial entry of $21.


      • 1 Reply to sparklybarks
      • Your analysis would be excellent for normal
        businesses. If your analysis would be correct there should
        not be any premium for growing companies which may
        spend alot on marketing and development in early stages
        and may not make the same types of EPS due to this

        The truth of the matter is that RDWR's cash is a
        definite plus because it allows them to increase the mktg
        expenses at fast rates and attain market share without
        risking any cash flow problems. The fact is that their
        cash position is not deteriorating which is an
        excellent sign.

        Of course in the long run the
        expenses will not rise at the same rate as sales!!! That
        is an absurd notion. If sales grow at this rate than
        I will be willing to see additional expenses in
        short run but in the long run that will be a big plus.

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