Cloudflare vs. Radware: Which DDoS Stock is the Stronger Play?

Cloudflare NET and Radware RDWR are both serving the needs of enterprise cybersecurity, with common aims like Distributed Denial of Service (DDoS) prevention and Web Application Firewall (WAF) deployment. Beyond DDoS and WAF, Cloudflare provides Zero Trust architecture and multi-cloud security, while Radware focuses on hybrid cloud defenses.Both Cloudflare and Radware seem to gain from the accelerated growth of the cybersecurity space due to aggravated cyberattacks. Per a Mordor Intelligence report, the cybersecurity market is projected to witness a CAGR of 12.63% from projecting a robust CAGR of 9.4% from 2025 to 2030.With this strong industry growth forecast, the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.The Case for NET StockAlongside DDoS and WAF, Cloudflare is growing rapidly in the security space on the back of its innovative cloud security platform. The company has entered into Zero Trust integrations with companies like Atlassian, Microsoft and Sumo Logic, to enable small, medium and large-sized businesses to secure reliable tools and applications with enterprise-ready Zero Trust security.Alongside Cloudflare’s cybersecurity solutions, its AI-based networking solutions are also gaining significant traction. The Cloudflare Workers AI platform has seen record adoption, with three million developers now actively using the platform.Despite these positive factors, Cloudflare’s decelerating sales growth remains a major concern. While Cloudflare reported 29% revenue growth in 2024, this marks a notable deceleration compared to previous years. In 2023, revenues grew 33% year over year, highlighting a gradual slowdown in top-line expansion. The company’s full-year 2025 revenue guidance of $2.09-$2.094 billion implies just 25% growth, a further decline from its 2024 growth rate.Cloudflare is facing challenges related to shrinking margins. To survive in the highly competitive cybersecurity market, Cloudflare has to invest in innovation and global reach. Rising costs related to research and marketing have contracted NET’s bottom line.Additionally, aggressive investments in infrastructure expansion and product development are likely to weigh on its near-term profitability over the next few quarters. The Zacks Consensus Estimate for Cloudflare’s 2025 earnings has been pegged at 81 cents per share, indicating year-over-year growth of 8%. The bottom-line expected growth rate is significantly lower than the top-line growth projection, suggesting that the company might be facing challenges in turning revenues into profit, potentially due to rising costs or inefficiencies.Image Source: Zacks Investment ResearchThe Case of RDWR StockRadware is experiencing traction in its cloud offerings that include Cloud DDoS Protection Service, Cloud Web Application Firewall and bot manager. In the fourth quarter of 2024, Radware reported that its cloud offering’s annual recurring revenues grew 19% year over year.The company’s unique hybrid model of offering on-prem and cloud-based services helped it win major deals. Furthermore, its launch of an artificial intelligence (AI)-based Security Operations Center, namely Xpert, will aid in client acquisition.Furthermore, Radware’s upgrades in bot detection, application programming interface security and DDoS defense through AI algorithms will enable it to gain more clients in the future.The Zacks Consensus Estimate for Radware’s 2025 earnings is pegged at 98 cents per share, indicating year-over-year growth of 12.6%.Image Source: Zacks Investment ResearchStock Price Performance and Valuation of RDWR and NETDue to broader market correction, both stocks have plunged in recent times. However, over the past year, Radware shares have returned 20.3% and Cloudflare shares have gained 17.2%.Image Source: Zacks Investment ResearchRadware is trading at a forward sales multiple of 2.87X, below the security industry’s 4.17X. Whereas, NET is trading at a forward sales multiple of 17.32X, indicating its overvaluation at present.Image Source: Zacks Investment ResearchConclusion: Radware vs. Cloudflare StockBoth companies are major players in the DDoS and WAF space, but Cloudflare’s slowing sales growth undermines its near-term prospects. Also, Radware’s low valuation multiple in comparison to Cloudflare makes it an attractive stock at present.Currently, Radware carries a Zacks Rank #2 (Buy), making the stock a stronger pick compared with Cloudflare, which has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Radware Ltd. (RDWR): Free Stock Analysis Report Cloudflare, Inc. (NET): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks