RDWR (RDWR)
Quantitative Summary
DeterministicFinancial health metrics are strong: Piotroski 7/9, Altman Z 3.2 (above 3.0 safe zone threshold). DCF fair value of $8 implies 67% downside based on model assumptions. Beneish M-Score of -1.71 exceeds the -2.22 academic threshold — earnings quality may warrant further review.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics reveal a significant capital allocation challenge where the return on invested capital of 1.9% falls sharply below the weighted average cost of capital at 10.2%, creating an -8.3% spread that erodes shareholder value despite high gross margins of 80.7%. While the DuPont decomposition suggests strong pricing power, this advantage is undermined by weak profitability factors and a net margin contraction to 6.7%, indicating operational inefficiencies in converting revenue into bottom-line returns. Credit metrics present a mixed signal; although the Altman Z-Score of 3.2 indicates moderate bankruptcy risk and the Beneish M-Score of -1.71 suggests low earnings manipulation potential, the Piotroski F-Score of 7/9 masks underlying financial deterioration that conflicts with the negative ROIC-WACC spread.
Valuation metrics indicate a market discount relative to historical norms but remain deeply out of alignment with intrinsic value models. The current P/E ratio of 57.2x trades approximately 30% below its five-year average, yet this apparent bargain is negated by a DCF fair value estimate of $8, implying -67.2% downside from current levels. This discrepancy suggests the market has priced in robust future cash flow growth at an annualized rate of 15.3%, which appears overly optimistic given the company's inability to generate returns exceeding its cost of capital. The divergence between historical multiples and fundamental reality points to a potential mean reversion risk rather than undervaluation.
Risk-adjusted performance data further complicates the investment thesis, highlighting structural weaknesses in both value and profitability dimensions. With an annual Fama-French alpha of -5.32%, the stock has consistently underperformed its benchmark after adjusting for market exposure, while a Value Factor (HML) score of -0.109 confirms a distinct growth tilt that lacks support from traditional valuation metrics. Additionally, the Profitability Factor (RMW) of -0.228 signals persistent struggles in generating high-quality earnings relative to peers. Collectively, these risk factors suggest that despite attractive headline multiples and clean fraud indicators, the underlying capital efficiency issues pose substantial headwinds for future total returns.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 10% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 8.2% | 10.2% | 12.2% |
|---|---|---|---|
| 2% | $9 | $7 | $6 |
| 3% | $10 | $8 | $7 |
| 4% | $12 | $9 | $7 |
Center = base case. Green = >10% upside, Red = >10% downside vs $31.55.
Pre-computed DCF: WACC=10.2%, terminal growth 3%. Fair value $8 (-67.2%). Not investment advice.
Price Chart with Moving Averages
Quant Health Deep Dive
Profitability & Value Creation
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like HACK or GWX, the fund manager is mechanically forced to buy or sell RDWR shares regardless of RDWR's individual fundamentals. We estimate $61M of passive capital is structurally linked to RDWR through 3 tracked ETFs. Passive flows have a limited but growing influence on RDWR's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 3 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in RDWR to visualize passive redemption contagion across ETFs and collateral stocks.
If RDWR (RDWR) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Broadcom Inc (AVGO) as the most exposed collateral stock, sharing 1 ETFs with RDWR. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 3 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
RDWR Ownership Dynamics
Passive funds hold 1 in every 15 RDWR shares, reducing daily market volatility.
RDWR (RDWR) exerts measurable gravity on the passive index market, currently representing 3.2% of the Amplify Cybersecurity ETF (HACK) and 0.1% of the GWX (GWX). Across 3 tracked ETFs, approximately 3M shares (6.7% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest RDWR Exposure
Float lock-up computed from 3 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
RDWR Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for RDWR over the past year sits near $23.98 (12% of 252-day volume). The current price of $31.55 trades 31.5% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
RDWR Capital Efficiency
How efficiently does RDWR convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
RDWR converts 180% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-8.3%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 8,341 | $26.79 | $223,455.39 |
| 2026-05-04 | 282 | $26.73 | $7,537.86 |
| 2026-05-01 | 607 | $26.80 | $16,267.6 |
| 2026-04-27 | 1,226 | $26.16 | $32,072.16 |
| 2026-04-08 | 8,226 | $27.88 | $229,340.88 |
| 2026-03-26 | 21 | $27.55 | $578.55 |
| 2026-03-24 | 74 | $25.73 | $1,904.02 |
| 2026-03-23 | 94 | $25.22 | $2,370.68 |
| 2026-03-12 | 700 | $25.06 | $17,542 |
| 2026-03-06 | 980 | $24.91 | $24,411.8 |
| 2026-02-06 | 122 | $24.18 | $2,949.96 |
| 2026-02-02 | 54 | $24.15 | $1,304.1 |
| 2026-01-22 | 3 | $24.12 | $72.36 |
| 2025-12-30 | 55 | $24.39 | $1,341.45 |
| 2025-12-29 | 7 | $24.37 | $170.59 |
| 2025-12-26 | 1,009 | $24.28 | $24,498.52 |
| 2025-12-19 | 25 | $23.87 | $596.75 |
| 2025-12-11 | 3 | $24.27 | $72.81 |
| 2025-11-25 | 29 | $22.30 | $646.7 |
| 2025-11-24 | 146 | $22.11 | $3,228.06 |
| 2025-10-23 | 899 | $25.69 | $23,095.31 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| ATEN | 0.589 | 0.619 | Moderate |
| NET | 0.565 | 0.607 | Moderate |
| TENB | 0.543 | 0.559 | Moderate |
| CRWD | 0.538 | 0.551 | Moderate |
| OKTA | 0.529 | 0.653 | Moderate |
| FTNT | 0.497 | 0.549 | Moderate |
| PANW | 0.489 | 0.487 | Moderate |
| S | 0.483 | 0.522 | Moderate |
| CHKP | 0.462 | 0.554 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare RDWR to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.