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Check Point (CHKP)
NASDAQ:CHKP
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Check Point
(NASDAQ:CHKP)
79Outperform
Positive Factors
Management and Leadership
The new CEO, Nadav Zafrir, is a game-changer who can leverage his prior experience to further penetrate the F500 and expand the product portfolio via M&A.
Market Positioning
CHKP is increasingly focused on the ~$15 billion SASE market, which can position it for longer-term success.
Product Growth
CHKP's Harmony email security product and SASE solution exhibit continued 50%-70% year-over-year growth, indicating strong market traction.
Negative Factors
Financial Performance
1Q25 results come in weaker than expected due to tariffs and macro uncertainty, with higher costs associated with sourcing materials from China.
Market Uncertainty
If 1Q25 gets off to a weaker-than-expected start, the Analyst session at the RSA may not serve as a catalyst, as this time will be spent explaining the miss in Q1.
Check Point (CHKP) vs. S&P 500 (SPY)
Market Cap
$23.78B
Dividend YieldN/A
Average Volume (3M)1.13M
Price to Earnings (P/E)29.4
Beta (1Y)0.54
Revenue Growth6.22%
EPS Growth6.15%
CountryUS
Employees6,669
SectorTechnology
Sector Strength40
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)7.46
Shares Outstanding108,368,520
10 Day Avg. Volume1,186,153
30 Day Avg. Volume1,131,651
Financial Highlights & Ratios
PEG Ratio4.78
Price to Book (P/B)N/A
Price to Sales (P/S)10.23
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
$243.25Price Target Upside13.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering28
Check Point Business Overview & Revenue Model
Company DescriptionCheck Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide. The company offers a portfolio of network security, endpoint security, data security, and management solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against 5th and 6th generation cyber-attacks across various networks, endpoint, cloud, workloads, Internet of Things, and mobile. The company also offers security gateways and software platforms that support small and medium sized business (SMB) to large enterprise data center and telco-grade environments; and threat prevention technologies and zero-day protections. In addition, the company provides cloud network security, security and posture management, cloud workload protection, and cloud web application protection for web applications and APIs; and Check Point Harmony that delivers endpoint and secure connectivity for remote user access. Further, the company provides technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services on Check Point products. It sells its products through multiple distribution channels, including distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was incorporated in 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 |
| 2.25B | 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
Negative
213.78
Price Trends
221.35
Negative
203.76
Positive
194.40
Positive
Market Momentum
3.51
Positive
59.36
Neutral
47.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHKP, the sentiment is Negative. The current price of 213.78 is below the 20-day moving average (MA) of 225.00, below the 50-day MA of 221.35, and above the 200-day MA of 194.40, indicating a neutral trend. The MACD of 3.51 indicates Positive momentum. The RSI at 59.36 is Neutral, neither overbought nor oversold. The STOCH value of 47.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $23.78B | 29.43 | 30.15% | ― | 6.22% | 6.15% | |
78 Outperform | $114.56B | 97.75 | 23.38% | ― | 13.86% | -46.44% | |
74 Outperform | $27.86B | ― | -1.21% | ― | 27.77% | 89.39% | |
73 Outperform | $34.68B | 12.30 | 14.50% | ― | 10.06% | 38060.98% | |
73 Outperform | $93.70B | 721.64 | -0.69% | ― | 29.39% | -119.62% | |
70 Outperform | $67.67B | 39.00 | 338.74% | ― | 12.27% | 54.69% | |
57 Neutral | $20.24B | 9.51 | -13.28% | 2.72% | 5.43% | -24.54% |
* Technology Sector Average
Performance Comparison
CHKP
Check Point
213.78
50.64
31.04%
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96.32
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52.91
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368.61
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Check Point Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 4.85% | 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.