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Radware Ltd. (RDWR) Message Board

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  • amdash amdash Oct 31, 2000 3:23 PM Flag

    FFIV just published great

    I agree with your numbers. But I would like to
    add the following:

    SSB states: "we expect a
    strong 3Q" they continue to say that they expect RDWR to
    exceed the estimates.

    My analysis of this
    information is as follows;

    Assuming a 30% increase in
    sales means $11M. this translates to a $2.5M sales
    increase which translates to additional profit margin of
    $2.1M (based on 84% cost of goods sold).

    This
    $2.1 million less assumption of increased expenses of
    $1.575M (last Q increased by $1.5M) means additional net
    income of $525K which will mean very close to break even
    in operating income and an additional 3 cents EPS
    over the prior quarter($525K/17,000,000), or EPS of 10
    cents for the quarter.

    Let me know what you
    think

    AMDASH

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    • Your assumptions looks logical.
      I was
      surprided to see that average estimate of 4 analysts is
      only $0.04 EPS.This estimate is even less than
      previous quarter($0.07).

      If our estimate is more
      updated, and we are going to see tomorrow after tradeEPS
      of $0.10 it looks like big surprise, and price will
      teact accordingly.

      Do you have any idea why
      first call is so low?

      • 1 Reply to meravhon
      • The analysts estimate have not changed since the
        beginning of the year. These estimates which have been
        proven low every quarter this year are obviously not
        updated. Apparently they do not adjust the numbers very
        often.

        But as I wrote you before, even SSB
        states:

        "Our EPS est. is $0.05 vs $(0.01) a year ago
        and
        consensus of $0.05 but we expect EPS to exceed our est. as
        has been the case each of the prior three
        Qs."

        So they are aware of this
        situation

        Regards,
        AMDASH

    • We have to apreciate your estimate. Almost the
      same as results released. I am glad that I agreed with
      the numbers. I also made nice investments. In coming
      days analysts should update their forecast. Looks like
      October was also good. I assume growth will continue in
      current quarter.With margin profit above 80%, an EPS for
      Q4 of $.12 will not be a surprise.
      Problem is
      what they are going to do with all the cash Company
      has in assests. If not acquiring FFIV maybe a
      dividend to miserable share holders might be a good
      idea.
      What do you think will be share price next week?

      • 1 Reply to meravhon
      • Meravhon,

        First of all thanks for the kind
        words.

        A few comments to your note as follows:

        It
        still remains to be seen, but the company management
        and SSB have stated in the past that the 4th quarter
        will be the one in which the fruits of the compaq deal
        will start to show. They estimate that this deal will
        eventually make up 10% of RDWR revenues, so it is very
        significant so there may be an even bigger up side in this
        4th quarter. This will increase sales. As to profit
        margins, it also remains to be seen if these high margins
        can be sustained. In analysts estimates, these
        margins are going down, but that has not happened
        yet.

        At this rate, I would say that EPS should surprise
        and increase to at least 13 to 14 cents in Q4. And
        this not taking into account any major increases due
        to the Compaq deal.

        As to cash in the bank,
        well I don't know about you, but these days just
        having this cash in the bank gives me a good feeling.
        They should be very prudent and use it only if the
        correct opportunity comes along.

        Lastly, as to the
        price of the share in the next week that is a mystery.
        It is obviously a very low price. I don't think that
        it is possible to predict. I just feel that it is an
        obvious good buy at this ridiculously low
        price.

        amdash

 
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