CHKP Should I Buy
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Check Point Software Technologies Ltd (CHKP) is not a strong buy at the moment for a beginner investor with a long-term focus. The stock has shown significant bearish momentum, with a sharp decline in price (-6.80% in the regular market and -6.64% in pre-market), bearish technical indicators, and mixed analyst sentiment. While the company's financials show growth in revenue, EPS, and net income, the recent earnings miss and lack of strong AI-driven growth catalysts make it less compelling for immediate investment. Additionally, hedge funds are selling, and there are no significant insider or congress trading trends to support a bullish case. A 'hold' action is recommended until the stock stabilizes or shows signs of recovery.
The technical indicators for CHKP are bearish. The MACD is negatively expanding (-0.659), the RSI is at 19.395 (oversold), and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with the next support at 159.389 and resistance at 174.481. Overall, the technical setup suggests continued downward pressure.
Q4 2025 financials showed revenue growth of 6% YoY and a significant EPS increase of 26% to $3.
The company projects strong revenue growth for 2026, with guidance between $2.83 billion and $2.95 billion.
Non-GAAP EPS exceeded expectations, indicating operational efficiency.
The stock price has dropped significantly (-6.80% in regular trading), reflecting negative sentiment.
Analysts have broadly lowered price targets, citing challenges like memory cost headwinds, lack of a strong AI growth narrative, and competitive pressures.
Hedge funds are selling heavily, with a 135.15% increase in selling activity over the last quarter.
Gross margin dropped slightly (-0.38% YoY), indicating potential cost pressures.
In Q4 2025, CHKP reported revenue growth of 5.85% YoY to $744.9 million, net income growth of 18.25% YoY to $304.5 million, and EPS growth of 21.65% YoY to $2.81. However, gross margin declined slightly to 86.84% (-0.38% YoY). While the financials are solid, the revenue missed analyst estimates, which may weigh on investor sentiment.
Analysts have mixed views on CHKP. JPMorgan, Truist, and Piper Sandler maintain positive ratings but have lowered price targets, citing challenges like memory cost headwinds and lack of AI-driven growth. Other firms like Morgan Stanley and Scotiabank remain neutral, highlighting concerns about competitive pressures and the broader software sector's struggles.
