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Check Point (CHKP) Up 23% YTD: Will the Momentum Continue?
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Check Point Software Technologies’ (CHKP - Free Report) stock has outperformed the Zacks Security industry and the broader U.S. stock market in the year so far. Check Point’s shares have surged 22.5% year to date (YTD), while the security industry increased 4.9%. Moreover, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 indexes have plunged 5.2%, 14.7% and 7.6%, respectively, YTD.
The stock’s outperformance reflects investors’ sustained confidence in the IT security solution provider at a time when the U.S. stock market has been rattled by the ongoing global macroeconomic and geopolitical uncertainties.
The year so far has been highly volatile for the U.S. stock market, with the global economy witnessing a massive slowdown due to the macroeconomic and geopolitical environment. The ongoing Russia-Ukraine war further increased worries for investors who were already concerned about the global economic recovery due to the increasing crude oil prices, rising inflation and a hawkish policy adopted by the Fed.
The aforementioned global macroeconomic and geopolitical uncertainties are likely to continue weighing on investors’ sentiments, which can result in more volatility in the U.S. equity market.
Check Point Software Technologies Ltd. Price and Consensus
However, this volatility created buying opportunities for investors. In the current scenario, investors can look for stocks with strong fundamentals that can stay afloat and grow once the impact of the aforementioned uncertainties cools off.
Considering CHKP’s resilience against the ongoing macroeconomic and geopolitical uncertainties and its strong fundamentals, it is wise to continue investing in the stock for further gains. The company performed brilliantly YTD and over the trailing 12 months and has the potential to continue the momentum as well.
What’s Driving Check Point’s Stock Higher?
Headquartered in Tel Aviv, Israel, Check Point offers a comprehensive range of software and combined hardware and software products aimed at IT security. Attached either to an operating system, a computer device, a server or a virtual desktop, these solutions cover network and gateway security, data security and management needs.
The heightening cybersecurity threats across enterprises due to the ongoing wave of digital transformation amid the COVID-19 crisis are spurring demand for Check Point’s cybersecurity solutions.
Further, the pandemic-induced work-from-home environment highlights the need for robust remote-working cloud solutions. Check Point’s solutions, such as Mobile Access, CloudGuard, Harmony, Infinity and Sandblast Agent, gained significant momentum among enterprises to facilitate the smooth and secure running of business operations remotely.
Additionally, acquisitions helped CHKP broaden its portfolio and capabilities and enter into newer markets, eventually driving revenue growth.
In the last two decades, the company acquired 13 businesses to expedite growth. These included Avanan, Odo Security, Cymplify, ForceNock Security, Lacoon Mobile Security, Hyperwise, Liquid Machines, Dynasec Ltd. and the security appliance business of Nokia Corporation, among others.
Check Point’s rich experience in the security space and the continued delivery of mission-critical solutions will help the company maintain and grow its market share. Per the latest Markets and Markets report, the global threat intelligence market will witness a CAGR of 6.5% and reach $15.8 billion by 2026 from $11.6 billion in 2021.
Impressive Growth Expectations
The Zacks Consensus Estimate of $7.26 per share for 2022 earnings suggests growth of approximately 3.4% from the year-ago period. For 2023, the consensus mark for earnings is pegged at $7.91, indicating a year-over-year increase of 9%. The long-term earnings per share growth rate is estimated at 7.3%.
Check Point has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an average earnings surprise of 4.1%.
Analysts have raised estimates for 2022 and 2023, reflecting their confidence in the company. In the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved a penny north, while the same for 2023 earnings has moved up by 5 cents in the past 30 days.
Check Point currently has a Zacks Rank #2 (Buy) and a Growth Score of A. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, CHKP appears to be a compelling investment proposition at the moment.
The Zacks Consensus Estimate for Jabil’s third-quarter fiscal 2022 earnings has been revised upward to $1.62 per share from $1.46 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 67 cents to $7.25 per share in the past 30 days.
Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 13.5%. Shares of JBL have rallied 4.8% in the trailing 12 months.
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by eight cents to $8.72 per share over the past seven days. For fiscal 2022, earnings estimates have moved upward by 182 cents to $35.67 per share over the past seven days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 24.2% over the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by five cents to $1.43 per share over the past 90 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 60 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has soared 22.5% in the past 12 months.
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Check Point (CHKP) Up 23% YTD: Will the Momentum Continue?
Check Point Software Technologies’ (CHKP - Free Report) stock has outperformed the Zacks Security industry and the broader U.S. stock market in the year so far. Check Point’s shares have surged 22.5% year to date (YTD), while the security industry increased 4.9%. Moreover, the Dow Jones Industrial Average, Nasdaq Composite and S&P 500 indexes have plunged 5.2%, 14.7% and 7.6%, respectively, YTD.
The stock’s outperformance reflects investors’ sustained confidence in the IT security solution provider at a time when the U.S. stock market has been rattled by the ongoing global macroeconomic and geopolitical uncertainties.
The year so far has been highly volatile for the U.S. stock market, with the global economy witnessing a massive slowdown due to the macroeconomic and geopolitical environment. The ongoing Russia-Ukraine war further increased worries for investors who were already concerned about the global economic recovery due to the increasing crude oil prices, rising inflation and a hawkish policy adopted by the Fed.
The aforementioned global macroeconomic and geopolitical uncertainties are likely to continue weighing on investors’ sentiments, which can result in more volatility in the U.S. equity market.
Check Point Software Technologies Ltd. Price and Consensus
Check Point Software Technologies Ltd. price-consensus-chart | Check Point Software Technologies Ltd. Quote
However, this volatility created buying opportunities for investors. In the current scenario, investors can look for stocks with strong fundamentals that can stay afloat and grow once the impact of the aforementioned uncertainties cools off.
Considering CHKP’s resilience against the ongoing macroeconomic and geopolitical uncertainties and its strong fundamentals, it is wise to continue investing in the stock for further gains. The company performed brilliantly YTD and over the trailing 12 months and has the potential to continue the momentum as well.
What’s Driving Check Point’s Stock Higher?
Headquartered in Tel Aviv, Israel, Check Point offers a comprehensive range of software and combined hardware and software products aimed at IT security. Attached either to an operating system, a computer device, a server or a virtual desktop, these solutions cover network and gateway security, data security and management needs.
The heightening cybersecurity threats across enterprises due to the ongoing wave of digital transformation amid the COVID-19 crisis are spurring demand for Check Point’s cybersecurity solutions.
Further, the pandemic-induced work-from-home environment highlights the need for robust remote-working cloud solutions. Check Point’s solutions, such as Mobile Access, CloudGuard, Harmony, Infinity and Sandblast Agent, gained significant momentum among enterprises to facilitate the smooth and secure running of business operations remotely.
Additionally, acquisitions helped CHKP broaden its portfolio and capabilities and enter into newer markets, eventually driving revenue growth.
In the last two decades, the company acquired 13 businesses to expedite growth. These included Avanan, Odo Security, Cymplify, ForceNock Security, Lacoon Mobile Security, Hyperwise, Liquid Machines, Dynasec Ltd. and the security appliance business of Nokia Corporation, among others.
Check Point’s rich experience in the security space and the continued delivery of mission-critical solutions will help the company maintain and grow its market share. Per the latest Markets and Markets report, the global threat intelligence market will witness a CAGR of 6.5% and reach $15.8 billion by 2026 from $11.6 billion in 2021.
Impressive Growth Expectations
The Zacks Consensus Estimate of $7.26 per share for 2022 earnings suggests growth of approximately 3.4% from the year-ago period. For 2023, the consensus mark for earnings is pegged at $7.91, indicating a year-over-year increase of 9%. The long-term earnings per share growth rate is estimated at 7.3%.
Check Point has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an average earnings surprise of 4.1%.
Analysts have raised estimates for 2022 and 2023, reflecting their confidence in the company. In the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved a penny north, while the same for 2023 earnings has moved up by 5 cents in the past 30 days.
Check Point currently has a Zacks Rank #2 (Buy) and a Growth Score of A. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities for investors. Thus, CHKP appears to be a compelling investment proposition at the moment.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology sector include Jabil (JBL - Free Report) , Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) . While Jabil sports a Zacks Rank #1, Broadcom and Apple each carry Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Jabil’s third-quarter fiscal 2022 earnings has been revised upward to $1.62 per share from $1.46 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 67 cents to $7.25 per share in the past 30 days.
Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 13.5%. Shares of JBL have rallied 4.8% in the trailing 12 months.
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by eight cents to $8.72 per share over the past seven days. For fiscal 2022, earnings estimates have moved upward by 182 cents to $35.67 per share over the past seven days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 24.2% over the past year.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by five cents to $1.43 per share over the past 90 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 60 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has soared 22.5% in the past 12 months.