Everyone is fully aware of the coronavirus, but there is another pandemic living amongst us: the cyber pandemic. Ransomware attacks are on the rise, making the need for cybersecurity solutions more acute that ever. This is where digital protection specialists such as Check Point (CHKP) enter the frame.
Reflecting the modern workplace’s widespread need for such services, on Monday, the company delivered Q2 results with beats both on the top-and bottom-line.
Revenue hit $526.1 million, a 4.1% year-over-year increase and coming in ahead of the estimates by $2.14 million, while non-GAAP EPS of $1.61 beat the Street’s forecast by $0.05. Billings were also better-than-expected – at $540.5 million, a way above the $508.2 million analysts had anticipated.
12% subscription revenue growth, robust operating margins (48.9% compared to the 47% estimate) and low OpEx levels were behind the upside, while management highlighted the growing adoption of the company’s end-to-end cyber security solution Infinity, for which revenues have tripled since 2Q20.
Oppenheimer’s Ittai Kidron hails a “solid” quarter and notes Infinity’s “accelerating momentum.” However, the cybersecurity segment is a crowded one, with many companies offering solutions to fend off digital attacks, and Kidron thinks there are others better positioned to forge ahead in the current environment.
“Consistent with our checks, Check Point is benefiting from industry-wide tailwinds as some customers look to consolidate disparate security solutions with one vendor,” the 5-star analyst said. “While we’re positive on the progress Check Point is seeing, many of its competitors have also established unified offerings, and we continue to see a high execution bar. Coupled with a valuation that is in line with that of similarly/better performing peers (such as Palo Alto Networks), we see shares as appropriately priced and remain on the sidelines.”
As such, Kidron maintained a Perform (i.e., Hold) rating for CHKP shares with no fixed price target in mind. (To watch Kidron’s track record, click here)
Overall, Check Point gets mixed reviews from Wall Street’s analyst corps. The stock’s Hold consensus rating is based on 3 Buys, 5 Holds, and 2 Sell. The average price target clocks in at $134.33, suggesting shares have room for ~7% upside in the year ahead. (See CHKP stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
