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Check Point (CHKP) Down 4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Check Point Software (CHKP - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Check Point due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Check Point Q4 Earnings and Revenues Top Estimates
Check Point Software Technologies Ltd. ended 2023 on a strong note by reporting overwhelming fourth-quarter results, wherein revenues and earnings both surpassed the respective Zacks Consensus Estimates and marked a significant year-over-year improvement.
The IT security solutions provider reported non-GAAP earnings of $2.57 per share, beating the Zacks Consensus Estimate of $2.46. The bottom line increased 5% from the year-ago quarter’s earnings of $2.45 per share and came ahead of its previously provided guidance range of $2.35-$2.55. The year-over-year growth was primarily attributable to increased revenues and improved margins, partially offset by higher income taxes.
Check Point’s quarterly revenues increased 4% year over year to $664 million and surpassed the Zacks Consensus Estimate of $660.3 million. The upside was driven by double-digit growth in Security subscription revenues. The company’s top line also came higher than the midpoint of the previous guidance range of $636-$686 million (midpoint $661 million).
Quarterly Details
Security subscription revenues were $265.8 million, increasing 15% year over year, driven by the adoption of the Infinity platform and the strong demand for the Harmony product family. Products and licenses revenues decreased 8.7% year over year to $158.3 million. Products that are currently in the process of transitioning to cloud solutions have been included in the subscription line. Total revenues from product and security subscriptions were $424.1 million, up 4.9% year over year.
Software updates and maintenance revenues increased to $239.4 million from $234.1 million reported in the year-ago quarter.
As of Sep 30, 2023, deferred revenues were $1.91 billion, up 2% year over year.
Non-GAAP gross profit increased 6% year over year to $591 million, while the margin improved 100 basis points (bps) to 89%. Non-GAAP operating income for the fourth quarter of 2023 totaled $309 million, up from $289 million in the year-ago quarter. The non-GAAP operating margin expanded 200 bps to 47%.
Full-Year 2023 Highlights
Check Point’s 2023 revenues increased 4% year over year to $2.42 billion and surpassed the Zacks Consensus Estimate of $2.41 billion. The top line was also almost in line with the midpoint of the previous guidance range of $2.34-$2.51 billion (midpoint $2.425 billion).
The IT security solutions provider reported non-GAAP earnings of $8.42 per share for 2023, beating the Zacks Consensus Estimate of $8.32. The bottom line increased 14% from the 2022 earnings of $7.40 per share and came ahead of its previously provided guidance range of $7.70-$8.30.
Balance Sheet & Other Details
Check Point exited the fourth quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.96 billion compared with the previous quarter’s $2.98 billion.
The company generated cash worth $236 million from operational activities during the fourth quarter and $1.04 billion in 2023. It repurchased 2.2 million shares for about $313 million during the reported quarter. In 2023, the company bought back 9.9 million shares for $1.29 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Check Point has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Check Point has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Check Point is part of the Zacks Computers - IT Services industry. Over the past month, Fair Isaac (FICO - Free Report) , a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended December 2023 more than a month ago.
Fair Isaac reported revenues of $382.06 million in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $4.81 for the same period compares with $4.26 a year ago.
For the current quarter, Fair Isaac is expected to post earnings of $5.80 per share, indicating a change of +21.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Fair Isaac has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Check Point (CHKP) Down 4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Check Point Software (CHKP - Free Report) . Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Check Point due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Check Point Q4 Earnings and Revenues Top Estimates
Check Point Software Technologies Ltd. ended 2023 on a strong note by reporting overwhelming fourth-quarter results, wherein revenues and earnings both surpassed the respective Zacks Consensus Estimates and marked a significant year-over-year improvement.
The IT security solutions provider reported non-GAAP earnings of $2.57 per share, beating the Zacks Consensus Estimate of $2.46. The bottom line increased 5% from the year-ago quarter’s earnings of $2.45 per share and came ahead of its previously provided guidance range of $2.35-$2.55. The year-over-year growth was primarily attributable to increased revenues and improved margins, partially offset by higher income taxes.
Check Point’s quarterly revenues increased 4% year over year to $664 million and surpassed the Zacks Consensus Estimate of $660.3 million. The upside was driven by double-digit growth in Security subscription revenues. The company’s top line also came higher than the midpoint of the previous guidance range of $636-$686 million (midpoint $661 million).
Quarterly Details
Security subscription revenues were $265.8 million, increasing 15% year over year, driven by the adoption of the Infinity platform and the strong demand for the Harmony product family. Products and licenses revenues decreased 8.7% year over year to $158.3 million. Products that are currently in the process of transitioning to cloud solutions have been included in the subscription line. Total revenues from product and security subscriptions were $424.1 million, up 4.9% year over year.
Software updates and maintenance revenues increased to $239.4 million from $234.1 million reported in the year-ago quarter.
As of Sep 30, 2023, deferred revenues were $1.91 billion, up 2% year over year.
Non-GAAP gross profit increased 6% year over year to $591 million, while the margin improved 100 basis points (bps) to 89%. Non-GAAP operating income for the fourth quarter of 2023 totaled $309 million, up from $289 million in the year-ago quarter. The non-GAAP operating margin expanded 200 bps to 47%.
Full-Year 2023 Highlights
Check Point’s 2023 revenues increased 4% year over year to $2.42 billion and surpassed the Zacks Consensus Estimate of $2.41 billion. The top line was also almost in line with the midpoint of the previous guidance range of $2.34-$2.51 billion (midpoint $2.425 billion).
The IT security solutions provider reported non-GAAP earnings of $8.42 per share for 2023, beating the Zacks Consensus Estimate of $8.32. The bottom line increased 14% from the 2022 earnings of $7.40 per share and came ahead of its previously provided guidance range of $7.70-$8.30.
Balance Sheet & Other Details
Check Point exited the fourth quarter with cash and cash equivalents, marketable securities and short-term deposits of $2.96 billion compared with the previous quarter’s $2.98 billion.
The company generated cash worth $236 million from operational activities during the fourth quarter and $1.04 billion in 2023. It repurchased 2.2 million shares for about $313 million during the reported quarter. In 2023, the company bought back 9.9 million shares for $1.29 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Check Point has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Check Point has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Check Point is part of the Zacks Computers - IT Services industry. Over the past month, Fair Isaac (FICO - Free Report) , a stock from the same industry, has gained 0.6%. The company reported its results for the quarter ended December 2023 more than a month ago.
Fair Isaac reported revenues of $382.06 million in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $4.81 for the same period compares with $4.26 a year ago.
For the current quarter, Fair Isaac is expected to post earnings of $5.80 per share, indicating a change of +21.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Fair Isaac has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.