Check Point Software Technologies Set to Announce Q4 Earnings on February 12
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy CHKP?
Source: seekingalpha
- Earnings Announcement Schedule: Check Point Software Technologies is set to announce its Q4 earnings on February 12 before market open, with a consensus EPS estimate of $2.77, reflecting a modest year-over-year growth of 2.6%, indicating stable profitability.
- Revenue Growth Expectations: The anticipated revenue for Q4 is $746.42 million, representing a 6.0% year-over-year increase, which highlights ongoing demand in the cybersecurity sector despite overall lackluster growth.
- Historical Performance Metrics: Over the past two years, Check Point has successfully beaten EPS estimates 88% of the time and revenue estimates 88% of the time, showcasing the reliability of its financial forecasts and operational performance.
- Estimate Revision Trends: In the last three months, EPS estimates have seen three upward revisions and two downward adjustments, while revenue estimates have experienced three upward revisions and one downward adjustment, indicating a divergence in market sentiment regarding the company's future performance.
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Analyst Views on CHKP
Wall Street analysts forecast CHKP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CHKP is 227.67 USD with a low forecast of 195.00 USD and a high forecast of 285.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
10 Buy
16 Hold
0 Sell
Moderate Buy
Current: 180.570
Low
195.00
Averages
227.67
High
285.00
Current: 180.570
Low
195.00
Averages
227.67
High
285.00
About CHKP
Check Point Software Technologies Ltd is an Israel-based company primarily engaged in the cybersecurity industry. The Company focuses on providing AI-powered, cloud-delivered security solutions to protect corporate enterprises and governments worldwide. Their key product is the Check Point Infinity Architecture, which is a comprehensive cybersecurity platform. The Platform aims to defend against fifth-generation cyber-attacks across various networks, endpoints, cloud environments, workloads, Internet of Things (IoT), and mobile devices. Apart of that, the Company offers a range of products and services designed to secure IT infrastructure. It integrates advanced threat prevention technologies, including firewall, intrusion prevention system (IPS), antivirus, anti-bot, and sandboxing capabilities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Check Point Software Technologies Set to Announce Q4 Earnings on February 12
- Earnings Announcement Schedule: Check Point Software Technologies is set to announce its Q4 earnings on February 12 before market open, with a consensus EPS estimate of $2.77, reflecting a modest year-over-year growth of 2.6%, indicating stable profitability.
- Revenue Growth Expectations: The anticipated revenue for Q4 is $746.42 million, representing a 6.0% year-over-year increase, which highlights ongoing demand in the cybersecurity sector despite overall lackluster growth.
- Historical Performance Metrics: Over the past two years, Check Point has successfully beaten EPS estimates 88% of the time and revenue estimates 88% of the time, showcasing the reliability of its financial forecasts and operational performance.
- Estimate Revision Trends: In the last three months, EPS estimates have seen three upward revisions and two downward adjustments, while revenue estimates have experienced three upward revisions and one downward adjustment, indicating a divergence in market sentiment regarding the company's future performance.
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- Cybersecurity Market Growth: The cybersecurity industry is rapidly expanding as companies shift operations from on-premise equipment to the cloud, particularly due to the rise of remote work, which has increased the demand for software-based security protocols, prompting enterprises to consolidate their security systems; Check Point has maintained low operating expenses and capital investments, resulting in an adjusted operating margin of 42%, one of the best in the industry.
- Increased Acquisitions and Investments: Check Point recently acquired Lakera, a security platform specializing in AI agents, and is ramping up spending on R&D and sales and marketing to enhance its software solutions, particularly in endpoint security and security operations, both of which have significantly higher margins than its legacy firewall hardware business.
- Earnings Growth Potential: While Check Point's revenue growth may not match that of more aggressive competitors, analysts expect steady mid-single-digit revenue growth over the next few years, with operating margins remaining stable near industry highs; the stock's forward P/E of 16.7 suggests it is undervalued, indicating potential for strong earnings growth.
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- Acquisition and R&D Investment: The company recently acquired Lakera, a security platform specializing in AI agents, and is ramping up spending on R&D and marketing to enhance its software solutions, particularly in remote work security and security operations.
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Check Point Software Technologies Set to Announce Q4 Earnings on February 12
- Earnings Announcement Schedule: Check Point Software Technologies is set to announce its Q4 earnings on February 12 before market open, with a consensus EPS estimate of $2.77, reflecting a modest year-over-year growth of 2.6%, indicating stable profitability.
- Revenue Growth Expectations: The anticipated revenue for Q4 is $746.42 million, representing a 6.0% year-over-year increase, which highlights ongoing demand in the cybersecurity sector despite overall lackluster growth.
- Historical Performance Metrics: Over the past two years, Check Point has successfully beaten EPS estimates 88% of the time and revenue estimates 88% of the time, showcasing the reliability of its financial forecasts and operational performance.
- Estimate Revision Trends: In the last three months, EPS estimates have seen three upward revisions and two downward adjustments, while revenue estimates have experienced three upward revisions and one downward adjustment, indicating a divergence in market sentiment regarding the company's future performance.
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- Market Reaction Tepid: This outflow reflects negative sentiment towards Ethereum, as investors may be withdrawing due to market volatility and uncertainty, exacerbating price pressure on Ethereum and affecting the overall stability of the cryptocurrency market.
- Investor Confidence Shaken: With the increase in outflows, investor confidence in the ProShares UltraShort Ether ETF is challenged, potentially leading more investors to reassess their allocations in crypto assets, which could influence future inflows.
- ETF Market Dynamics Shifting: The outflow situation of this ETF may prompt other investors to monitor its performance, thereby affecting the dynamics of the entire ETF market, particularly in the cryptocurrency sector, potentially leading to more similar products experiencing outflows or inflows.
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Market Impact: The software sector has experienced a $2 trillion loss due to concerns over potential disruptions from artificial intelligence technology.
Investment Perspective: Analysts at J.P. Morgan view this downturn as a buying opportunity and have identified several AI-resistant companies, including Microsoft and CrowdStrike.
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- Analyst Optimism: Wall Street analysts are generally bullish on Check Point Software (CHKP), with a lowest price target of $195, approximately 8.6% above its current market price, although most analysts rate it as Hold rather than Buy, indicating slower growth compared to competitors, yet steady growth could yield significant returns for patient long-term investors.
- Cybersecurity Market Growth: The cybersecurity industry is rapidly expanding as companies shift operations from on-premise equipment to the cloud, particularly due to the rise of remote work, which has increased the demand for software-based security protocols, prompting enterprises to consolidate their security systems; Check Point has maintained low operating expenses and capital investments, resulting in an adjusted operating margin of 42%, one of the best in the industry.
- Increased Acquisitions and Investments: Check Point recently acquired Lakera, a security platform specializing in AI agents, and is ramping up spending on R&D and sales and marketing to enhance its software solutions, particularly in endpoint security and security operations, both of which have significantly higher margins than its legacy firewall hardware business.
- Earnings Growth Potential: While Check Point's revenue growth may not match that of more aggressive competitors, analysts expect steady mid-single-digit revenue growth over the next few years, with operating margins remaining stable near industry highs; the stock's forward P/E of 16.7 suggests it is undervalued, indicating potential for strong earnings growth.
See More
Cybersecurity Industry Consolidation Accelerates
- Market Consolidation Trend: As more enterprises opt to consolidate cybersecurity service providers, the industry is experiencing rapid growth, with Check Point Software maintaining an industry-high operating margin of 42%, reflecting its robust financial management capabilities.
- Investment Appeal: Check Point's stock valuation sits below its peers, with a current market price that is 8.6% below Wall Street's lowest target price of $195, although analysts generally adopt a Hold stance, indicating caution regarding its growth rate.
- Acquisition and R&D Investment: The company recently acquired Lakera, a security platform specializing in AI agents, and is ramping up spending on R&D and marketing to enhance its software solutions, particularly in remote work security and security operations.
- Stable Growth Outlook: While Check Point's revenue growth may not match that of its competitors, analysts expect steady mid-single-digit growth over the next few years, with operating margins remaining at industry highs, demonstrating its ongoing competitiveness in the market.
See More
