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Radware (RDWR) has sunk about 20% since Juniper Networks (JNPR) announced a $75mm deal with competitor Riverbed Technology (RVBD). I believe the market has overreacted to this piece of news and RDWR offers a good long term entry point for patient growth investors.

"Radware Ltd. develops, manufactures, and markets integrated networking solutions worldwide. Its solutions include application delivery and network security solutions." (Business description from Yahoo Finance)

7 reasons RDWR is a solid pick at $30 a share:

  1. The company has a robust balance sheet with over $135mm in net cash on the books (20% of market capitalization).
  2. Consensus estimates for both FY2012 and FY2013 have risen approximately 3% over the past three months.
  3. Earnings are going in the right direction. The company made $1.34 a share in FY2011 and is projected to earn $1.74 a share in FY2012 and $2.02 in FY2013.
  4. The five analysts that cover the stock have price targets ranging from $38 to $45 a share on RDWR, all significantly above its current price.
  5. The stock is selling near the bottom of its five year valuation based on P/E and P/CF. The company almost tripled OCF from FY2009 to FY2011.
  6. Analysts expect revenue growth of between 10% and 15% annually for both FY2012 and FY2013. The company has grown sales at sales at better than a 15% yearly clip over the past five years and has a five year projected PEG of around 1 (.99).
  7. Radware's forward PE is 15, a substantial discount to its five year average (35.3).
Source: 20% Pullback Offers Good Entry Point For This Cheap Cash Rich Tech Stock