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Check Point Shares Rise 28% YTD: How Should You Play the Stock?
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Check Point Software Technologies (CHKP - Free Report) shares have returned 28% year to date (YTD), outperforming the broader Zacks Computer and Technology sector’s appreciation of 22.2%.
Over the same timeframe, shares of Unisys returned 0.7% while Accenture and Evolv dropped 3.3% and 6.3%, respectively. Industry appreciated 7.9%.
Will Strong Billing & Clientele Aid CHKP’s Prospects?
CHKP’s robust performance can be attributed to stronger billing and an increase in the number of customers using AI-enabled and cloud-delivered Infinity platform (strong double-digit growth in the second quarter of 2024) to increase security levels.
Check Point Software Technologies Ltd. Price and Consensus
In the second quarter of 2024, calculated billings grew 10% to $620 million.
Its acquisitions like Perimeter 81 and the latest Cyberint are expected to drive prospects despite currency headwinds and increasing expenses.
However, CHKP shares are overvalued, as suggested by a Value Score of C.
So, the question for investors is - does the billing growth and expanding clientele make CHKP shares attractive despite stretched valuation? Let’s analyze.
CHKP Leveraging AI, Acquisitions to Drive Growth
Check Point has leveraged AI to provide undisrupted service to its clients worldwide and has won deals in several industries, including the public sector.
AI Infinity Copilot has been gaining traction along with Threat Cloud AI and the CloudGuard family. The new GenAI Protect holds promise.
In the second quarter of 2024, Check Point onboarded 92 government agencies in 32 countries. CHKP also caters to almost every Fortune 500 company.
In the first half of 2024, revenues hit $1.22 billion, up 6.2% year over year. CHKP aims to increase revenues by selling more subscription-based solutions.
Strong demand for Infinity is a key catalyst. In the second quarter, CHKP added clients globally, including New Zealand’s largest telecom provider, Spark, Nasdaq from the United States, Cathay Pacific and WPP in Europe.
Check Point recently announced the acquisition of Cyberint Technologies, an external risk management solution provider. The deal will allow CHKP to upgrade its Security Operation Centre and provide collaborative threat prevention services.
The buyout of Perimeter 81 has helped Check Point deliver the fastest and safest Secure Access Service Edge solution to its customers.
CHKP’s 2024 Outlook Positive
CHKP expects its revenues to be in the range of $615 million - $650 million and earnings between $2.19 and $2.29 per share for the third quarter of fiscal 2024.
The Zacks Consensus Estimate for third-quarter 2024 earnings is currently pegged at $2.25 per share, up by a penny over the past 60 days.
The consensus mark for third-quarter 2024 revenues is pegged at $635.17 million, indicating year-over-year growth of 6.52%.
For 2024, the Zacks Consensus Estimate for revenues is pegged at $2.56 billion, indicating year-over-year growth of 6.13%.
The consensus mark for earnings is pegged at $9.07 per share, up by a penny over the past 60 days.
CHKP Shares – To Buy, Hold or Sell?
Check Point’s focus on leveraging AI is expected to drive clientele. Its strong portfolio offerings, along with solid liquidity, bodes well for investors.
As of June 30, 2024, the cash balance was $3.06 billion. It announced an expanded share repurchase program worth $2 billion.
However, stretched valuation, stiff competition in the cybersecurity market and unfavorable forex are concerns.
CHKP currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point into the stock
Image: Bigstock
Check Point Shares Rise 28% YTD: How Should You Play the Stock?
Check Point Software Technologies (CHKP - Free Report) shares have returned 28% year to date (YTD), outperforming the broader Zacks Computer and Technology sector’s appreciation of 22.2%.
CHKP shares have also outperformed the Zacks Computer – IT services industry, as well as its peers including Unisys (UIS - Free Report) , Accenture (ACN - Free Report) and Evolv Technologies (EVLV - Free Report) .
Over the same timeframe, shares of Unisys returned 0.7% while Accenture and Evolv dropped 3.3% and 6.3%, respectively. Industry appreciated 7.9%.
Will Strong Billing & Clientele Aid CHKP’s Prospects?
CHKP’s robust performance can be attributed to stronger billing and an increase in the number of customers using AI-enabled and cloud-delivered Infinity platform (strong double-digit growth in the second quarter of 2024) to increase security levels.
Check Point Software Technologies Ltd. Price and Consensus
Check Point Software Technologies Ltd. price-consensus-chart | Check Point Software Technologies Ltd. Quote
In the second quarter of 2024, calculated billings grew 10% to $620 million.
Its acquisitions like Perimeter 81 and the latest Cyberint are expected to drive prospects despite currency headwinds and increasing expenses.
However, CHKP shares are overvalued, as suggested by a Value Score of C.
So, the question for investors is - does the billing growth and expanding clientele make CHKP shares attractive despite stretched valuation? Let’s analyze.
CHKP Leveraging AI, Acquisitions to Drive Growth
Check Point has leveraged AI to provide undisrupted service to its clients worldwide and has won deals in several industries, including the public sector.
AI Infinity Copilot has been gaining traction along with Threat Cloud AI and the CloudGuard family. The new GenAI Protect holds promise.
In the second quarter of 2024, Check Point onboarded 92 government agencies in 32 countries. CHKP also caters to almost every Fortune 500 company.
In the first half of 2024, revenues hit $1.22 billion, up 6.2% year over year. CHKP aims to increase revenues by selling more subscription-based solutions.
Strong demand for Infinity is a key catalyst. In the second quarter, CHKP added clients globally, including New Zealand’s largest telecom provider, Spark, Nasdaq from the United States, Cathay Pacific and WPP in Europe.
Check Point recently announced the acquisition of Cyberint Technologies, an external risk management solution provider. The deal will allow CHKP to upgrade its Security Operation Centre and provide collaborative threat prevention services.
The buyout of Perimeter 81 has helped Check Point deliver the fastest and safest Secure Access Service Edge solution to its customers.
CHKP’s 2024 Outlook Positive
CHKP expects its revenues to be in the range of $615 million - $650 million and earnings between $2.19 and $2.29 per share for the third quarter of fiscal 2024.
The Zacks Consensus Estimate for third-quarter 2024 earnings is currently pegged at $2.25 per share, up by a penny over the past 60 days.
The consensus mark for third-quarter 2024 revenues is pegged at $635.17 million, indicating year-over-year growth of 6.52%.
For 2024, the Zacks Consensus Estimate for revenues is pegged at $2.56 billion, indicating year-over-year growth of 6.13%.
The consensus mark for earnings is pegged at $9.07 per share, up by a penny over the past 60 days.
CHKP Shares – To Buy, Hold or Sell?
Check Point’s focus on leveraging AI is expected to drive clientele. Its strong portfolio offerings, along with solid liquidity, bodes well for investors.
As of June 30, 2024, the cash balance was $3.06 billion. It announced an expanded share repurchase program worth $2 billion.
However, stretched valuation, stiff competition in the cybersecurity market and unfavorable forex are concerns.
CHKP currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point into the stock
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.