Check Point (CHKP) AI Stock Analysis

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Check Point

(NASDAQ:CHKP)

Rating:82Outperform

Price Target:

$254.00

▲(14.07%Upside)

Check Point's stock is supported by strong financial fundamentals, evidenced by robust revenue growth and effective cash flow management. Technical indicators suggest a balanced momentum, while the valuation is relatively high, reflecting growth expectations. The recent earnings call confirms continued demand and performance but highlights caution due to increased expenses and potential macroeconomic challenges.

Positive Factors

CEO Leadership

CEO Nadav Zafrir has re-energized the organization, allowing for faster cross-functional decision-making and reinforcing CHKP's shift toward agility.

Product Growth

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

Strategy and Integration

CHKP announced its acquisition of Veriti Cybersecurity, a preemptive threat exposure and risk mitigation platform, further strengthening its hybrid mesh architecture strategy.

Negative Factors

Macro Environment

Management noted a solid pipeline of firewall appliance demand for the remainder of the year, yet provided cautious guidance given macro uncertainty, which could delay firewall refresh cycles.

Revenue Deceleration

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. SPDR S&P 500 ETF (SPY)

Market Cap

$24.89B

Dividend YieldN/A

Average Volume (3M)677.73K

Price to Earnings (P/E)30.3

Beta (1Y)0.41

Revenue Growth6.40%

EPS Growth6.49%

CountryUS

Employees6,669

SectorTechnology

Sector Strength84

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)2.21

Shares Outstanding108,368,520

10 Day Avg. Volume636,850

30 Day Avg. Volume677,730

Financial Highlights & Ratios

PEG Ratio5.28

Price to Book (P/B)5.39

Price to Sales (P/S)0.00

P/FCF Ratio14.93

Enterprise Value/Market Cap0.63

Enterprise Value/Revenue1.53

Enterprise Value/Gross Profit6.89

Enterprise Value/Ebitda4.09

Forecast

1Y Price Target

$239.65

Price Target Upside7.63% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering23

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
Analyzes income from different business units or product lines, highlighting which areas drive growth and profitability, and where strategic adjustments might be needed.

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: 4.88%|

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.

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.60B	2.56B	2.41B	2.33B	2.17B	2.06B
	Gross Profit
2.26B	2.25B	2.13B	2.03B	1.91B	1.84B
	EBIT
877.60M	876.00M	899.10M	884.30M	907.50M	904.20M
	EBITDA
957.20M	1.06B	1.02B	920.50M	938.20M	931.30M
	Net Income Common Stockholders
852.70M	845.70M	840.30M	796.90M	815.60M	846.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.46B	1.37B	1.53B	1.64B	1.69B	1.69B
	Total Assets
5.56B	5.75B	5.70B	5.72B	5.90B	5.84B
	Total Debt
0.00	32.30M	26.10M	0.00	0.00	0.00
	Net Debt
-450.20M	-473.90M	-537.70M	-196.00M	-271.90M	-255.70M
	Total Liabilities
2.81B	2.97B	2.87B	2.80B	2.64B	2.37B
	Stockholders Equity
2.75B	2.79B	2.82B	2.93B	3.26B	3.47B
Cash Flow		Free Cash Flow
1.08B	1.03B	1.02B	1.06B	1.17B	1.13B
	Operating Cash Flow
1.11B	1.05B	1.04B	1.08B	1.18B	1.15B
	Investing Cash Flow
-210.79M	-24.00M	468.70M	-70.40M	-235.60M	-42.40M
	Financing Cash Flow
-1.06B	-1.06B	-1.16B	-1.17B	-1.11B	-1.09B

Check Point Technical Analysis

Technical Analysis Sentiment

Positive

Last Price222.67

Price Trends

50DMA

220.08

Positive

100DMA

218.89

Positive

200DMA

203.74

Positive

Market Momentum

MACD

2.58

Positive

RSI

47.18

Neutral

STOCH

50.36

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 222.67 is below the 20-day moving average (MA) of 225.20, above the 50-day MA of 220.08, and above the 200-day MA of 203.74, indicating a neutral trend. The MACD of 2.58 indicates Positive momentum. The RSI at 47.18 is Neutral, neither overbought nor oversold. The STOCH value of 50.36 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHKP	82 Outperform	$24.89B	30.33	30.92%	―	6.40%	6.49%
PANW	81 Outperform	$130.66B	112.13	21.16%	―	13.91%	-50.96%
FTNT	80 Outperform	$77.79B	41.83	205.91%	―	13.83%	58.13%
CRWD	79 Outperform	$116.56B	721.64	-5.76%	―	25.94%	-226.80%
XYZ	78 Outperform	$39.66B	15.68	12.93%	―	4.60%	425.38%
ZS	72 Outperform	$46.39B	―	-2.68%	―	25.46%	49.20%
Sector *	62 Neutral	$11.93B	10.60	-7.51%	3.00%	7.40%	-8.09%

* Technology Sector Average

Performance Comparison

CHKP

Check Point

222.67

65.11

41.32%

FTNT

Fortinet

102.02

41.79

69.38%

PANW

Palo Alto Networks

194.39

34.56

21.62%

XYZ

Block

64.06

1.70

2.73%

Zscaler

299.86

118.81

65.62%

CRWD

CrowdStrike Holdings

476.98

94.17

24.60%

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.