Check Point (CHKP) AI Stock Analysis

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Check Point

(NASDAQ:CHKP)

77Outperform

Check Point's overall stock score is solid, driven by strong financial performance and positive earnings call highlights. The company demonstrates robust growth and profitability, supported by effective cash flow management and a strong balance sheet. However, valuation metrics and technical indicators suggest some caution, and macroeconomic uncertainties could impact future performance. The lack of dividend yield may also limit attractiveness to certain investors.

Positive Factors

CEO Impact

Check Point stock has appreciated 18% since July 2024, when it announced the appointment of the new CEO, compared to NASDAQ’s -6%.

Financial Performance

Check Point delivered a solid set of quarterly results, exceeding consensus expectations for revenue and pro forma EPS.

Product Growth

CHKP reported an impressive 14% yoy product growth, marking the 4th consecutive quarter of positive growth.

Negative Factors

Revenue Guidance

Second-quarter guidance was mixed, coming in slightly below consensus for revenue growth.

Subscription and Maintenance Revenue

We also flag continued deceleration of the Subscription and Maintenance revenues, from 15% and 2% YoY growth in 1Q24, to 10% and -1% in 1Q25, respectively.

Subscription Revenue

Subscription revenue of $290.6MM increased 10% Y/Y but was slightly below consensus ($292.3MM) and remained unchanged relative to last qtr.

Check Point (CHKP) vs. S&P 500 (SPY)

Market Cap

$23.58B

Dividend YieldN/A

Average Volume (3M)1.01M

Price to Earnings (P/E)29.1

Beta (1Y)0.48

Revenue Growth6.40%

EPS Growth6.49%

CountryUS

Employees6,669

SectorTechnology

Sector Strength65

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)2.21

Shares Outstanding108,368,520

10 Day Avg. Volume1,051,130

30 Day Avg. Volume1,014,552

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.01

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit10.66

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$239.33

Price Target Upside8.46% 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 Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments, providing insight into which areas are driving growth and which may need strategic adjustments to enhance profitability or market position.

Chart InsightsCheck Point's Security Subscriptions and Software Updates and Maintenance segments show consistent growth, highlighting strong demand for recurring services. Notably, the Products and Licenses segment, which had been fluctuating, saw a 14% boost in the latest quarter, driven by high demand for Quantum Force appliances. Despite increased operating expenses and macroeconomic concerns, the company's robust financial performance and strategic investments in the Infinity platform underscore its resilience and growth potential, with revenues exceeding expectations and a positive outlook for the next quarter.

Data provided by:

Main Street Data

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.

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.

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Positive

Last Price220.67

Price Trends

50DMA

220.56

Positive

100DMA

210.03

Positive

200DMA

198.90

Positive

Market Momentum

MACD

0.11

Negative

RSI

53.58

Neutral

STOCH

89.03

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHKP, the sentiment is Positive. The current price of 220.67 is above the 20-day moving average (MA) of 215.34, above the 50-day MA of 220.56, and above the 200-day MA of 198.90, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 53.58 is Neutral, neither overbought nor oversold. The STOCH value of 89.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	77 Outperform	$23.58B	29.07	30.92%	―	6.40%	6.49%
FTNT	76 Outperform	$82.39B	47.41	205.91%	―	12.27%	54.69%
CRWD	76 Outperform	$109.86B	721.64	-0.69%	―	29.39%	-119.62%
PANW	74 Outperform	$124.93B	106.60	23.38%	―	13.86%	-46.44%
ZS	74 Outperform	$36.07B	―	-1.21%	―	27.77%	89.39%
XYZ	72 Outperform	$29.09B	11.50	12.93%	―	4.60%	425.38%
Sector *	60 Neutral	$10.77B	10.41	-6.71%	2.99%	7.69%	-13.12%

* Technology Sector Average

Performance Comparison

CHKP

Check Point

220.67

68.29

44.82%

FTNT

Fortinet

97.74

39.63

68.20%

PANW

Palo Alto Networks

188.53

40.69

27.52%

XYZ

Block

50.11

-23.09

-31.54%

Zscaler

233.15

61.19

35.58%

CRWD

CrowdStrike Holdings

428.63

110.69

34.81%

Check Point Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 3.94%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Positive

The earnings call presented strong financial performance with notable revenue and EPS growth, driven by high demand for Quantum Force appliances and the Infinity platform. However, increased operating expenses and macroeconomic uncertainties were noted, indicating a need for caution in future projections.

Q1-2025 Updates

Positive Updates

Revenue and Earnings Growth

Revenues grew by 7% to $638 million, surpassing the midpoint of projections by $4 million. Non-GAAP EPS was $2.21, $0.03 above the midpoint, representing a 9% year-over-year growth.

Strong Performance of Quantum Force Appliances

Demand for Quantum Force appliances continued to be strong, driving a 14% year-over-year growth in product and license revenues.

Cash Flow and Share Buyback

Operating cash flow was strong at $421 million, representing a 17% growth year-over-year. The company bought back approximately 1.5 million shares for $325 million.

Infinity Platform Growth

Revenues from the Infinity platform showed strong double-digit growth year-over-year and now exceed 15% of total revenues.

Global Revenue Distribution

Revenues grew across regions: EMEA by 5%, America by 6%, and Asia-Pacific by 12% year-over-year.

Negative Updates

Increased Operating Expenses

Operating expenses increased by 7% to $305 million, driven by the acquisition of Cyberint and continued investment in workforce.

Concerns Over Macroeconomic Environment

Potential impact from macroeconomic factors and tariffs was noted, with caution advised for future quarters despite current strong demand.

Company Guidance

In the first quarter of 2025, Check Point Software reported robust financial performance, with revenues reaching $638 million, exceeding the midpoint of guidance and reflecting a 7% year-over-year increase. Non-GAAP EPS also surpassed expectations, growing 9% year-over-year to $2.21. The company saw a 5% rise in deferred revenues, amounting to $1,915 million, and calculated billings grew by 7% to $553 million. Demand for their Quantum Force appliances was a key driver, contributing to a 14% increase in product and license revenues. Check Point's global revenue distribution included 45% from EMEA, 42% from America, and 13% from Asia-Pacific, with respective growth rates of 5%, 6%, and 12%. Operating cash flow was strong at $421 million, marking a 17% increase year-over-year, and the company maintained a cash balance of $2.9 billion while continuing its share buyback program. Looking forward, the company provided a revenue outlook for the second quarter ranging from $642 to $682 million, anticipating year-over-year growth between 2% and 9%, and an EPS forecast of $2.32 to $2.42.

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.