CIBC World Markets has raised its price target on Radware (Nasdaq: RDWR) to $20 from $15, after a “very positive meeting” with Meir Moshe, the technology company’s CFO.
Radware, which develops Internet traffic management solutions, is carving out a defensible market niche with significant near-term sales momentum, said CIBC analyst Steve Kamman in a report dated June 17.
Kamman, who rates Radware a “Sector Outperformer”, said he was particularly encouraged by progress in the company’s efforts to grow in the Chinese market.
“Radware has completed the hiring of the bulk of Nortel’s sales team in China, providing substantially more horsepower in a key market. We also believe the company has made significant progress in gaining traction with US distributors,” the analyst stated.
Kamman said he remained very optimistic about Radware’s revenue and earnings momentum this year. “We expect Radware’s deferred revenues and other payables continued to increase (up 10% to $12.98 million) giving us confidence that Radware should sustain its revenue and EPS momentum in coming quarters,” he said.
Kamman’s current forecasts are for EPS of $0.34 in 2003, compared with a loss of $0.13 per share in 2002.
The analyst cautioned that there were significant risks to the price target.
“Radware is a very small company and is facing large competitors in a market that remains soft. Its management and operations are centered in Israel, and the company’s free float is quite small. Finally, Radware’s small size and business profile make this a highly speculative investment even in a speculative sector such as ours,” he concluded.
Radware shares closed on Nasdaq on Friday at $17.17.
Published by Globes [online] - www.globes.co.il - on 23 June, 2003