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Check Point (CHKP)
NASDAQ:CHKP
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Check Point
(NASDAQ:CHKP)79Outperform
Positive Factors
Leadership and Strategy
The new CEO has galvanized the CHKP story, better positioning it to capitalize on the security opportunity.
Product and Market Position
CHKP is embracing its play as a leading network security vendor in a hybrid, multi-vendor world, with its open-garden approach to technology partners.
Negative Factors
Execution Challenges
The new CEO, while making bold moves, still needs to rehabilitate compounding years of execution stagnation, especially in highly-competitive markets, to recuperate share loss and galvanize brand awareness.
Check Point (CHKP) vs. S&P 500 (SPY)
Market Cap
$24.33B
Dividend YieldN/A
Average Volume (3M)992.42K
Price to Earnings (P/E)29.7
Beta (1Y)0.54
Revenue Growth6.22%
EPS Growth6.15%
CountryUS
Employees6,450
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)7.46
Shares Outstanding109,982,506
10 Day Avg. Volume985,231
30 Day Avg. Volume992,421
Financial Highlights & Ratios
PEG Ratio4.82
Price to Book (P/B)N/A
Price to Sales (P/S)10.34
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$231.04Price Target Upside4.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering29
Check Point Business Overview & Revenue Model
Company DescriptionCheck Point Software Technologies Ltd. engages in the development and market of software and hardware solutions for information technology security. The company products include threat prevention, next generation firewalls, mobile security, and security management. Its solutions cater to the following: point of sale systems, automated teller machines, private and public cloud, and telecommunications providers. The company was founded by Gil Shwed, Marius Nacht, and Shlomo Kramer in July 1993 and is headquartered in Tel Aviv, Israel.
How the Company Makes MoneyCheck Point makes money primarily through the sale of its cybersecurity products and services. The company's revenue streams include software licenses, subscriptions, and support services. Software licenses provide clients access to Check Point's security technologies, while subscriptions offer ongoing updates and threat intelligence to enhance protection. Support services include maintenance and technical assistance, ensuring clients can effectively deploy and manage Check Point's solutions. Additionally, Check Point benefits from strategic partnerships with technology vendors, resellers, and managed service providers, which help expand its market reach and drive sales. The company's focus on innovation and its comprehensive security architecture contribute significantly to its financial performance by attracting a wide range of customers seeking robust cybersecurity defenses.
Check Point Financial Statement Overview
Summary
Check Point demonstrates strong financial health with robust profit margins, efficient cash flow management, and a solid balance sheet. The company exhibits stable growth and profitability, with low financial risk due to minimal leverage. Continued focus on operational efficiencies will be key to sustaining this performance.Income Statement
Check Point has shown consistent revenue growth, with a revenue growth rate of 6.23% in 2024 compared to 2023. The gross profit margin remains strong at approximately 88.51%, indicating efficient cost management. However, the slight decline in EBIT and EBITDA compared to 2023 suggests a need for monitoring operational efficiencies.85
Very Positive
Balance Sheet
The company maintains a strong balance sheet with a very low debt-to-equity ratio, reflecting minimal leverage risk. The equity ratio stands at 48.55%, indicating a solid equity position. Return on Equity remains robust at around 30.31%, showcasing effective use of shareholder funds.90
Very Positive
Cash Flow
Operating cash flow is robust, reflecting strong cash generation capabilities. The free cash flow to net income ratio is impressive, indicating efficient capital allocation. Although free cash flow growth has slowed compared to prior years, the overall cash position remains strong.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.56B | 2.41B | 2.33B | 2.17B | 2.06B | Gross Profit |
| 2.27B | 2.13B | 2.03B | 1.91B | 1.84B | EBIT |
| 876.00M | 899.10M | 884.30M | 907.50M | 904.20M | EBITDA |
| 934.60M | 1.02B | 920.50M | 938.20M | 931.30M | Net Income Common Stockholders |
| 845.70M | 840.30M | 796.90M | 815.60M | 846.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.37B | 1.53B | 1.64B | 1.69B | 1.69B | Total Assets |
| 5.74B | 5.70B | 5.72B | 5.90B | 5.84B | Total Debt |
| 32.30M | 26.10M | 0.00 | 0.00 | 0.00 | Net Debt |
| -473.90M | -537.70M | -196.00M | -271.90M | -255.70M | Total Liabilities |
| 2.95B | 2.87B | 2.80B | 2.64B | 2.37B | Stockholders Equity |
| 2.79B | 2.82B | 2.93B | 3.26B | 3.47B |
| Cash Flow | Free Cash Flow | |||
| 1.03B | 1.02B | 1.06B | 1.17B | 1.13B | Operating Cash Flow |
| 1.06B | 1.04B | 1.08B | 1.18B | 1.15B | Investing Cash Flow |
| -210.00M | 468.70M | -70.40M | -235.60M | -42.40M | Financing Cash Flow |
| -1.06B | -1.16B | -1.17B | -1.11B | -1.09B |
Check Point Technical Analysis
Positive
221.22
Price Trends
201.97
Positive
195.09
Positive
184.90
Positive
Market Momentum
4.93
Positive
61.65
Neutral
64.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHKP, the sentiment is Positive. The current price of 221.22 is above the 20-day moving average (MA) of 218.05, above the 50-day MA of 201.97, and above the 200-day MA of 184.90, indicating a bullish trend. The MACD of 4.93 indicates Positive momentum. The RSI at 61.65 is Neutral, neither overbought nor oversold. The STOCH value of 64.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHKP.
Check Point Risk Analysis
Check Point disclosed 36 risk factors in its most recent earnings report. Check Point reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Check Point Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $2.89T | 31.30 | 30.64% | 0.81% | 15.04% | 12.38% | |
80 Outperform | $121.61B | 104.16 | 19.68% | ― | 13.86% | -46.44% | |
79 Outperform | $24.33B | 29.66 | 30.32% | ― | 6.22% | 6.15% | |
79 Outperform | $81.88B | 47.12 | 116.83% | ― | 12.27% | 54.69% | |
74 Outperform | $251.67B | 27.72 | 20.18% | 2.52% | -5.34% | -30.57% | |
60 Neutral | $11.97B | 41.77 | 6.02% | 2.44% | -8.82% | -10.01% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
CHKP
Check Point
221.60
63.85
40.48%
CSCO
Cisco Systems
63.96
16.30
34.20%
FTNT
Fortinet
106.80
35.48
49.75%
JNPR
Juniper Networks
36.01
-0.54
-1.48%
MSFT
Microsoft
401.02
1.98
0.50%
PANW
Palo Alto Networks
184.28
44.85
32.17%
Check Point Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 8.49% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment, with strong financial performance, product demand, and strategic initiatives for future growth. However, challenges such as increased operating expenses and competition in North America remain areas to address.Highlights
Record Revenue and EPS Growth
For the fiscal year 2024, Check Point achieved revenues of $2.565 billion, $50 million above the midpoint of projections, with a non-GAAP EPS growth of 9% year-over-year to $9.60.
Strong Demand for Quantum Force Appliances
Quantum Force appliances saw a strong demand, with an 8% growth in revenues. The product line has been a key driver of the company's performance.
Global Revenue Growth
All geographic regions experienced revenue growth, with new business bookings increasing by double digits in all geographies.
Deferred Revenue and Billing Increases
Deferred revenues grew by 5% to $2 billion, and calculated billing grew by 11% to $959 million.
Solid Cash Flow and Share Buyback
Operating cash flow was strong at $1.059 billion for the year, with $325 million worth of shares bought back in Q4, totaling $1.3 billion for the year.
Lowlights
Increase in Operating Expenses
Operating expenses increased by 12% compared to the previous year, primarily due to investments in go-to-market strategies and the acquisition of Cyberint.
Challenges in North America
Despite a strong Q4, North America remains a highly competitive market, necessitating strategic focus to improve growth.
Product and Innovation Demands
Customers expect more innovation from Check Point, particularly in SaaS models, SASE solutions, and AI integration.
Company Guidance
During the fourth quarter and full-year financial results conference call for Check Point Software, several key financial metrics and guidance were discussed. The company reported Q4 revenues of $704 million, surpassing the projection midpoint by $9 million, with a non-GAAP EPS at the top end of projections at $2.70. For the fiscal year 2024, revenues reached $2.565 billion, $50 million above the initial projection midpoint, with a non-GAAP EPS of $9.60, reflecting a 9% year-over-year growth and $0.16 above midpoint projections. Deferred revenues increased by 5% to $2 billion, while calculated billings rose by 11% to $959 million. The operating margin for the year increased by 10% to $1.181 billion, with operating expenses growing by 10%, largely due to the acquisition of Cyberint. The company's annual operating cash flow was strong at $1.059 billion, and it continued its share buyback program, purchasing shares for $325 million in Q4 and $1.3 billion for the full year. Looking ahead to 2025, Check Point forecasts revenues between $2.66 billion and $2.76 billion, with a non-GAAP EPS ranging from $9.60 to $10.20.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.