tiprankstipranks
Market News

Check Point Reports Solid Q2 Results; Stock Price Drops 4.5%

Story Highlights

Check Point’s revenue and earnings for the second quarter exceeded expectations. However, declining operating metrics remain a concern.

Security software services provider Check Point Software Technologies Ltd. (NASDAQ: CHKP) reported better-than-expected results for the second quarter ended June 30, 2022. Both revenue and earnings surpassed the consensus estimates. However, the shares of the company declined 4.5% during the normal trading hours. This could be attributed to wider market concerns.

Revenue, Earnings Rise

Check Point’s revenue for the quarter came in at $571 million, up 9% from the previous year. Further, the figure topped the consensus estimate of $560 million. The year-over-year rise of 11.8% and 14.3% in revenues from Products and licenses, and Security subscriptions, respectively, drove the overall growth in revenues for the company.

The company reported earnings per share (EPS) of $1.64, which denotes a growth of 2% from the year-ago quarter. Moreover, the figure surpassed the consensus estimate of $1.61.

A Look at the Key Operating Metrics

Check Point reported an operating income of $249 million compared to $257 million in the year-ago quarter.

The company generated cash flow from operations of $212 million, down from $264 million in the second quarter of 2021.

Meanwhile, during the second quarter, Check Point repurchased roughly 2.6 million shares for a cost of about $325 million.

Management’s Commentary

CEO of Check Point, Gil Shwed said, “We are pleased with our second quarter results. Over the past quarter, cyber-attacks have increased by 32 percent while advanced attacks like ransomware have grown by 59 percent, underscoring why cyber-security is so critical to keep our world going. Our strategic vision of a consolidated prevention-first security architecture is more relevant than ever to combat today’s cyber challenges.”

Wall Street’s Take

Overall, the Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on five Buys, four Holds, and two Sells. The CHKP average price target of $139.27 implies the stock has upside potential of 17% from current levels. Shares have declined 5.5% over the past year.

Bloggers Are Optimistic

Overall, 92% of bloggers on TipRanks are bullish on Check Point, compared to the sector average of 65%.

Key Takeaways

Check Point’s results for the second quarter have been robust. Both revenue and earnings have clocked year-over-year growth even amid a tough economic environment. However, the company’s decline in some of the key operating metrics leaves a sour taste.

Read full Disclosure

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More