Radware Ltd. (RDWR) vs Rackspace Technology, Inc. (RXT)

Radware Ltd. and Rackspace Technology, Inc. are both Software Infrastructure companies. Radware Ltd. is the larger, with a market value of $1.3B against $1.1B — 1.2× the size. Rackspace Technology, Inc. has negative trailing earnings, so its P/E is not meaningful; Radware Ltd. trades at 75.7×. Radware Ltd. grew revenue faster over the last twelve months: 10.1% against 0.34%. Radware Ltd. has the higher net margin (5.33% vs −5.88%) and the higher return on invested capital (5.22% vs −3.17%). Across the 19 metrics below, Radware Ltd. leads on 13 and Rackspace Technology, Inc. on 6.

Valuation

Metric RDWR RXT Software Infrastructure median
P/E 75.72 n/m 28.02
P/S 3.88 0.37 3.07
P/B 3.43 n/m 3.36
Price to free cash flow n/m 24.34 17.12
EV/EBITDA 46.92 14.74 14.91
EV/Sales 3.09 1.49 3.03
Earnings yield 1.32% (16.29%) 0.13%
Free cash flow yield (2.23%) 4.11% 1.15%

Profitability

Metric RDWR RXT Software Infrastructure median
Gross margin 80.55% 17.92% 61.23%
Operating margin 2.91% (3.26%) 0.00%
Net margin 5.33% (5.88%) 0.00%
Free cash flow margin 10.22% 1.52% 1.67%
Return on equity 4.59% 13.25% 0.59%
Return on assets 2.58% (5.64%) 0.00%
Return on invested capital 5.22% (3.17%) 0.00%

Growth

Metric RDWR RXT Software Infrastructure median
Revenue growth (TTM) 10.10% 0.34% 13.41%
EPS growth (last fiscal year) 221.43% 75.26% —
Revenue growth, 5-year CAGR 3.84% (0.16%) 15.81%
Net income growth, 5-year CAGR 16.02% 0.00% 0.00%

Health

Metric RDWR RXT Software Infrastructure median
Debt to equity 0.00 (2.44) 0.06
Current ratio 1.63 0.76 1.55
Net debt to EBITDA (11.14) 11.17 0.08

Dividend

Metric RDWR RXT Software Infrastructure median
Dividend yield — — 1.53%
Payout ratio 0.00 0.00 0.00

Size

Metric RDWR RXT Software Infrastructure median
Market cap 1.25b 1.07b 835.96m

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