Radware Plunges 9.67% as Earnings Miss and Sector Weakness Fuel Investor Anxiety: What's Next for the Cloud Security Giant?

Summary
• Radware’s shares nosedived 9.67% intraday, trading at $25.59 against a $28.33 previous close
• Earnings beat EPS estimates but revenue fell short by 1%, sparking profit-taking
• Cloud ARR growth accelerated to 21% YoY, yet mixed guidance left analysts cautious

Radware’s dramatic intraday plunge has ignited a firestorm of speculation in the cybersecurity sector. The stock’s collapse from $27.76 to $25.45—a 9.67% drop—has left investors scrambling to parse the company’s Q2 earnings report, which showed robust cloud growth but a revenue shortfall. With the Infrastructure Software sector reeling (Palo Alto Networks down 5.6%), the move raises urgent questions about Radware’s ability to sustain its cloud momentum and navigate macroeconomic headwinds.

Earnings Disappointment and Sector Headwinds Trigger Sharp Selloff
Radware’s 9.67% intraday drop reflects a confluence of factors: a 1% revenue miss against $74.2M actuals vs. $74.98M estimates, lack of forward guidance, and broader sector weakness. While non-GAAP EPS of $0.28 beat estimates, the muted revenue growth—despite 21% cloud ARR expansion—signaled to investors that the company’s growth engine may be losing steam. Compounding this, the absence of Q3 guidance left analysts without a clear roadmap, triggering profit-taking. The selloff aligns with a broader Infrastructure Software sector slump, as macroeconomic concerns and AI-driven market rotations weigh on tech stocks.

Infrastructure Software Sector Reels as Palo Alto Networks Leads Weakness
The Infrastructure Software sector mirrored Radware’s decline, with Palo Alto Networks (PANW) down 5.6% intraday. Both stocks faced pressure from a combination of earnings underperformance and macroeconomic anxieties. While Radware’s cloud ARR growth (21% YoY) outpaced PANW’s recent results, the sector-wide sell-off highlights investor skepticism toward tech valuations amid rising interest rates and AI implementation delays. Radware’s drop, however, was more pronounced due to its lack of forward guidance and narrower revenue beat.

Bearish Technicals and High-Leverage Options Signal Aggressive Short-Term Plays
• 200-day MA: $23.61 (below current price), RSI: 34.4 (oversold), MACD: 0.316 (bearish divergence)
• Bollinger Bands: Price at $25.59 near lower band ($27.23), signaling potential rebound
• 30D support: $29.12, 200D support: $23.07; key resistance at $29.09 (middle band)

Radware’s technicals present a volatile setup: oversold RSI and bearish MACD divergence suggest further downside, while Bollinger Band compression hints at a potential rebound. For aggressive traders, the RDWR20250919C27 call option (strike $27, expiring 9/19) offers high leverage (27.09%) and moderate delta (0.388) for a bullish breakout. The RDWR20250919P25 put (strike $25, expiring 9/19) is ideal for bearish bets, with 122.56% implied volatility and a -0.388 delta. In a 5% downside scenario (targeting $24.31), the put’s payoff would be $0.69, while the call would expire worthless. Given the stock’s 9.67% drop and oversold RSI, short-term traders may consider the put for a bearish play, while long-term bulls could use the pullback to buy into the 200D MA support.

Backtest Radware Stock Performance
The iPath Dow Jones Industrial Average ETN (RDWR) has historically shown resilience following a 10% intraday plunge. The backtest data reveals that the 3-day win rate is 48.84%, the 10-day win rate is 52.49%, and the 30-day win rate is 55.48%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 2.62%, which occurred on day 59, suggesting that RDWR can recover from significant intraday declines.

Radware’s 9.67% Drop Tests 200D Support—Aggressive Shorts and Selective Longs in Focus
Radware’s sharp selloff has created a pivotal inflection point: the stock now tests its 200D MA at $23.61 and key support at $23.07. While the sector’s weakness (PANW down 5.6%) suggests continued pressure, the 34.4 RSI and bearish MACD divergence indicate a potential oversold rebound. For now, aggressive shorts should target the RDWR20250919P25 put for a bearish play, while long-term bulls may see the pullback as a buying opportunity near the 200D MA. Watch for a break below $24.31 to confirm the bear case—or a rebound above $27.23 to signal a reversal. Palo Alto Networks’ 5.6% drop underscores the sector’s fragility, making disciplined risk management essential.