Check Point initiated with a Hold at Needham

Needham analyst Matt Dezort initiated coverage of Check Point with a Hold rating. The company’s underinvestment in both product and go-to-market has hindered growth and led to share losses over the last decade, and while the firm commends its recent reinvestment efforts, Check Point is facing a hurdle for halting share loss and reaccelerating growth amid declining mind-share in channel checks and intensifying competition as Check Point expands into adjacencies, the analyst tells investors in a research note. The valuation setup for the stock is favorable, trading at an enterprise value to expected 2024 free cash flow multiple of 13-times, but the firm also sees “durable growth as challenged with few upside drivers”.