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What's in the Cards for Check Point (CHKP) in Q4 Earnings?
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Check Point Software Technologies Ltd. (CHKP - Free Report) is set to report fourth-quarter 2016 results on Jan 19. Last quarter, the company posted a positive earnings surprise of 4.12%. Notably, Check Point Software has outperformed the Zacks Consensus Estimate thrice while matching the same once in the trailing four quarters. It has an average positive earnings surprise of 3.55%.
Let's see how things are shaping up for this announcement.
Factors to Consider
We believe that Check Point Software will continue to benefit from strong demand for cybersecurity solutions. Note that the financial well-being, brand image and reputation of enterprises and governments are always exposed to the risk of cyber threats. Consequently, cybersecurity has become a mission-critical, high-profile requirement.
With rapid technological advancement, organizations are increasingly adopting the “bring your own device” (BYOD) policy to enhance employee productivity with anytime/anywhere access. This trend, in turn, calls for stricter data security measures.
Moreover, various independent research firms had forecasted strong demand in 2016. Gartner had forecasted that worldwide Information Security Spending would reach $81.6 billion in 2016, marking year-over- year growth of 7.9%.
We believe that Check Point Software must have capitalized on this opportunity and this may well be reflected in the company’s results in the to-be reported quarter.
Furthermore, the rapid adoption of Check Point’s data center appliances and the continuous enhancements in data center product lines are expected to provide adequate support to revenue growth. Additionally, the company’s continuous share buybacks bode well for investors.
However, competition from Cisco, Juniper Networks and Fortinet (FTNT - Free Report) , an uncertain economic environment and currency headwinds remain concerns.
Earnings Whispers
Our proven model does not conclusively show that Check Point Software will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.15. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Check Point Software carries a Zacks Rank #1. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Check Point Software Technologies Ltd. Price and EPS Surprise
Texas Instrument (TXN - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #2.
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What's in the Cards for Check Point (CHKP) in Q4 Earnings?
Check Point Software Technologies Ltd. (CHKP - Free Report) is set to report fourth-quarter 2016 results on Jan 19. Last quarter, the company posted a positive earnings surprise of 4.12%. Notably, Check Point Software has outperformed the Zacks Consensus Estimate thrice while matching the same once in the trailing four quarters. It has an average positive earnings surprise of 3.55%.
Let's see how things are shaping up for this announcement.
Factors to Consider
We believe that Check Point Software will continue to benefit from strong demand for cybersecurity solutions. Note that the financial well-being, brand image and reputation of enterprises and governments are always exposed to the risk of cyber threats. Consequently, cybersecurity has become a mission-critical, high-profile requirement.
With rapid technological advancement, organizations are increasingly adopting the “bring your own device” (BYOD) policy to enhance employee productivity with anytime/anywhere access. This trend, in turn, calls for stricter data security measures.
Moreover, various independent research firms had forecasted strong demand in 2016. Gartner had forecasted that worldwide Information Security Spending would reach $81.6 billion in 2016, marking year-over- year growth of 7.9%.
We believe that Check Point Software must have capitalized on this opportunity and this may well be reflected in the company’s results in the to-be reported quarter.
Furthermore, the rapid adoption of Check Point’s data center appliances and the continuous enhancements in data center product lines are expected to provide adequate support to revenue growth. Additionally, the company’s continuous share buybacks bode well for investors.
However, competition from Cisco, Juniper Networks and Fortinet (FTNT - Free Report) , an uncertain economic environment and currency headwinds remain concerns.
Earnings Whispers
Our proven model does not conclusively show that Check Point Software will beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $1.15. Hence, the difference is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Check Point Software carries a Zacks Rank #1. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Check Point Software Technologies Ltd. Price and EPS Surprise
Check Point Software Technologies Ltd. Price and EPS Surprise | Check Point Software Technologies Ltd. Quote
Stocks to Consider
Here are a couple of companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
Seagate Technology Plc (STX - Free Report) , with an Earnings ESP of +1.87% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Texas Instrument (TXN - Free Report) , with an Earnings ESP of +1.24% and a Zacks Rank #2.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>