Check Point (CHKP) AI Stock Analysis

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Check Point

(NASDAQ:CHKP)

Rating:79Outperform

Price Target:

$255.00

▲(14.86%Upside)

Check Point's strong financial performance and positive earnings call results are the primary contributors to its high score. However, the valuation and technical analysis suggest potential risks, such as short-term weakness and a relatively high P/E ratio, which slightly dampen the overall outlook.

Positive Factors

Financial Performance

CHKP's current FY25 guidance could be revised higher as prior macro concerns gradually fade, potentially impacting shares positively.

International Expansion

Preference for non-US vendors in EMEA/APAC supported renewals and early SASE traction is setting up well for a second-half inflection.

Product Revenue Growth

The Quantum Force appliances are expected to drive product revenue growth, with ambitious targets for Mobile Secure Workspace seen as highly feasible due to its mission criticality.

Negative Factors

Billings Growth

Billings growth is expected to further decelerate, though there is potential to report upside and maintain the growth rate.

Profitability

Lowering FY26 operating margin assumptions to 40.5% from 41.5% indicates a potential decrease in profitability.

Revenue Growth

Subscription revenue growth has continued to decelerate, down to just 10% Y/Y in 1Q25.

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

Market Cap

$24.17B

Dividend YieldN/A

Average Volume (3M)683.96K

Price to Earnings (P/E)29.4

Beta (1Y)0.40

Revenue Growth6.40%

EPS Growth6.49%

CountryUS

Employees6,669

SectorTechnology

Sector Strength86

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)2.21

Shares Outstanding108,368,520

10 Day Avg. Volume694,188

30 Day Avg. Volume683,957

Financial Highlights & Ratios

PEG Ratio16.36

Price to Book (P/B)8.63

Price to Sales (P/S)0.00

P/FCF Ratio21.99

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue2.28

Enterprise Value/Gross Profit10.27

Enterprise Value/Ebitda6.11

Forecast

1Y Price Target

$242.42

Price Target Upside9.19% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering13

Check Point Business Overview & Revenue Model

Company DescriptionCheck Point Software Technologies Ltd. (CHKP) is a leading global provider of cybersecurity solutions, headquartered in Tel Aviv, Israel. The company specializes in network security, endpoint protection, cloud security, mobile security, data security, and security management. Known for its innovative approach, Check Point offers a comprehensive portfolio of products and services designed to protect businesses from cyber threats, including firewalls, VPNs, intrusion prevention systems, and advanced threat prevention solutions.

How the Company Makes MoneyCheck Point makes money primarily through the sale of its cybersecurity products and services. The company's revenue model includes software and hardware sales, subscription-based services, and support and maintenance contracts. Key revenue streams include product licenses, which provide businesses with access to Check Point's security software, and security subscriptions that offer ongoing protection and updates. Additionally, the company generates income from professional services, such as consulting and training. Strategic partnerships with technology vendors and channel partners also play a significant role in expanding Check Point's market reach and enhancing its distribution capabilities, contributing to its earnings.

Check Point Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Examines revenue from various business segments, indicating which areas drive growth and how diversified the company’s income streams are.

Chart InsightsCheck Point's Security Subscriptions and Software Updates segments show consistent growth, with Security Subscriptions leading the charge. The recent earnings call highlights a 14% rise in product and license revenues, driven by strong demand for Quantum Force appliances, suggesting a strategic focus on hardware innovation. Despite macroeconomic concerns, the company anticipates continued revenue growth, supported by robust demand and strategic platform expansions like Infinity. Investors should watch for potential impacts from increased operating expenses and economic uncertainties, but the overall outlook remains positive with a strong cash position and ongoing share buybacks.

Data provided by:

Main Street Data

Check Point Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 4.57%|

Next Earnings Date:Jul 30, 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.

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

Very Positive

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

Very Positive

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

Very Positive

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
EBITDA	1.06B	1.02B	920.50M	938.20M	931.30M
Net Income	845.70M	840.30M	796.90M	815.60M	846.60M
Balance Sheet
Total Assets	5.75B	5.70B	5.72B	5.90B	5.84B
Cash, Cash Equivalents and Short-Term Investments	1.37B	1.53B	1.64B	1.69B	1.69B
Total Debt	32.30M	26.10M	0.00	0.00	0.00
Total Liabilities	2.97B	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	1.05B	1.04B	1.08B	1.18B	1.15B
Investing Cash Flow	-24.00M	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 Price222.01

Price Trends

50DMA

222.43

Negative

100DMA

221.48

Positive

200DMA

208.00

Positive

Market Momentum

MACD

-0.23

Negative

RSI

51.09

Neutral

STOCH

68.51

Neutral

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 222.01 is above the 20-day moving average (MA) of 220.94, below the 50-day MA of 222.43, and above the 200-day MA of 208.00, indicating a neutral trend. The MACD of -0.23 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 68.51 is Neutral, 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 (68)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	79 Outperform	$24.17B	29.45	30.92%	―	6.40%	6.49%
XYZ	75 Outperform	$49.02B	19.39	12.93%	―	4.60%	425.38%
FTNT	74 Outperform	$80.41B	43.24	205.91%	―	13.83%	58.13%
PANW	74 Outperform	$132.84B	114.00	21.16%	―	13.91%	-50.96%
CRWD	74 Outperform	$115.03B	721.64	-5.76%	―	25.94%	-226.80%
ZS	72 Outperform	$44.12B	―	-2.68%	―	25.46%	49.20%
Sector *	68 Neutral	¥234.20B	14.80	7.50%	2.60%	9.27%	6.74%

* Technology Sector Average

Performance Comparison

CHKP

Check Point

222.01

40.84

22.54%

FTNT

Fortinet

104.77

47.46

82.81%

PANW

Palo Alto Networks

201.16

41.10

25.68%

XYZ

Block

79.77

18.19

29.54%

Zscaler

284.30

102.30

56.21%

CRWD

CrowdStrike Holdings

462.03

207.88

81.79%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 22, 2025