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Check Point Rallies despite Growing Analyst Concerns
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Check Point Rallies despite Growing Analyst Concerns

It wasn’t looking like a great morning for cybersecurity stock Check Point (NASDAQ:CHKP). It slipped slightly going into Tuesday’s trading but made a comeback as the afternoon went on. The biggest reason for all the trouble traces back to its recently-released earnings report, and the downgrade said report prompted by BTIG.

The downgrade came from BTIG analyst Gray Powell, who noted that Check Point was bringing out weaker numbers than expected, particularly for billing and product revenue. That led Powell to cut his rating from Buy to Hold. Powell also pointed to the likely culprit behind the softer-than-expected numbers – a macroeconomic environment fueled by the uncertainty that left businesses reconsidering plans to replace current firewalls and other security systems. A similar downgrade came from BMO Capital only yesterday, citing likely weakness in revenue figures for the rest of the year.

Cybersecurity is still a vital expense. Just ask T-Mobile (NASDAQ:TMUS), who recently revealed news about its second data breach of 2023. Though this one only impacted about 836 subscribers and only revealed limited information, it was going on for a month and left T-Mobile with a serious black eye. But even in such cases, businesses that already have robust cybersecurity presences in place are likely thinking that they can get another year or two out of current systems and save some money.

As for Check Point, analysts are split on its current capability. With nine Buy ratings, 11 Holds, and three Sells, Check Point stock is considered a Moderate Buy by analyst consensus. Further, Check Point stock offers investors 11.23% upside potential thanks to its average price target of $134.67.

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