Last Update 11 Dec 25

CHKP: Sustained 20% Billings And AI Security Developments Will Drive Upside Potential

Analysts modestly raised their price target on Check Point Software Technologies to approximately $215. This reflects confidence in the company’s 20 percent billings growth and resilient margins, despite some uncertainty around the durability of the recent acceleration.

Analyst Commentary

Bullish Takeaways

Bullish analysts point to Q3 billings growth of around 20 percent, which substantially exceeded prior expectations and suggests revitalized demand for the company’s security platform.
Several price target increases into the low to mid 200 dollar range indicate that improved execution and stronger growth are being reflected in higher valuation frameworks.
The shares are viewed as attractive relative to peers given the combination of accelerating billings and the potential to sustain industry leading margins over the medium term.
Analysts highlight that even after adjusting for deal timing effects, underlying growth trends appear solid, supporting confidence in continued mid to high single digit top line expansion.

Bearish Takeaways

Bearish analysts remain cautious on the pace and durability of the recent acceleration, noting that it is too early to declare a sustained growth inflection.
Some research points to deal push outs and pull ins across quarters, which could be masking true demand levels and adds uncertainty to forecasting.
Concerns persist around potential margin pressure into 2026, including non recurring tax benefits and foreign exchange headwinds that may not support current profitability levels.
Neutral ratings from some firms underline a view that while execution is improving, the risk reward profile is balanced at the current valuation following the recent move in the price target range.

What's in the News

RBC Capital raised its price target on Check Point shares to $215 from $207, citing broad-based beats versus expectations and roughly 20 percent billings growth, while flagging one time tax benefits and FX headwinds as key moving pieces (RBC Capital research note).
Check Point introduced its Quantum Firewall Software R82.10 with 20 new capabilities to secure AI adoption, strengthen hybrid mesh network security, and expand integrations across more than 250 third party tools, deepening its AI centric security platform strategy.
The company launched AI Cloud Protect with NVIDIA for on premises AI factories, using NVIDIA BlueField DPUs to secure AI model development and inference workloads at the network and host level without impacting performance.
Check Point expanded its AI security footprint through a collaboration with Microsoft to embed AI Guardrails, data loss prevention and threat prevention directly into Microsoft Copilot Studio, enabling safer deployment of generative AI agents.
The firm reported progress on shareholder returns, disclosing that it repurchased 1.6 million shares for 325 million dollars in the latest quarter, bringing total buybacks under the long running program to more than 92 million shares.

Valuation Changes

The discount rate has risen slightly from 10.55 percent to about 10.67 percent, implying a modestly higher required return for valuing future cash flows.
Revenue growth assumptions are effectively unchanged, holding steady at roughly 6.09 percent, indicating no material shift in long term top line expectations.
Net profit margin remains stable at around 30.94 percent, reflecting continued expectations for strong, consistent profitability.
The future P/E has increased marginally from about 32.36x to 32.46x, suggesting a slightly higher valuation multiple on expected earnings.
Fair value is unchanged at approximately 228.40 dollars per share, indicating that the small adjustments to inputs did not alter the overall intrinsic value estimate.

Quantum Force appliances and the Infinity platform drive strong revenue growth, with potential for sustained growth through customer retention and cross-selling.
Strategic AI integration and expansion initiatives are set to enhance user experiences and drive innovation-led revenue growth.
Competitive pressures and reliance on Taiwan could strain margins, while strategic shifts may disrupt execution amidst macroeconomic uncertainty and tariff implications.

Catalysts

About Check Point Software Technologies

Develops, markets, and supports a range of products and services for IT security worldwide.What are the underlying business or industry changes driving this perspective?

Check Point's Quantum Force appliances have driven strong demand, resulting in significant product and license revenue growth. This trend, expected to continue with a robust pipeline, indicates potential for sustained revenue and earnings growth.
The Infinity platform continues to gain traction, with strong double-digit revenue growth and increased customer adoption, now accounting for over 15% of total revenue. This supports expectations for revenue growth through enhanced customer retention and cross-selling opportunities.
Strategic focus on SASE and AI integration, such as embedding Check Point security engines that use AI for enhanced user experience and security, suggests future revenue growth as enterprises seek comprehensive solutions for modern hybrid workforces.
Expansion initiatives, like the new R&D center in India, aim to improve user and cyber practitioner experiences, potentially impacting revenue and net margins through innovation-driven revenue streams and cost management.
The continued investment in partnerships and key talent, such as the integration of Gil Friedrich's division and appointing Yonatan Zanger as CTO, positions Check Point to capitalize on AI and hybrid workforce security trends, potentially driving revenue and EPS growth.

Check Point Software Technologies Earnings and Revenue Growth

Check Point Software Technologies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Check Point Software Technologies's revenue will grow by 5.9% annually over the next 3 years.
Analysts assume that profit margins will shrink from 32.5% today to 31.5% in 3 years time.
Analysts expect earnings to reach $989.0 million (and earnings per share of $10.1) by about September 2028, up from $858.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $865.3 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 29.6x on those 2028 earnings, up from 24.6x today. This future PE is lower than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to decline by 3.08% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.63%, as per the Simply Wall St company report.

Check Point Software Technologies Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The macroeconomic environment presents challenges such as potential volatility and uncertainty, which could lead to deals being delayed or slipping into subsequent quarters, impacting near-term revenue projections.
The company faces a competitive landscape in emerging technologies like SASE and AI, potentially leading to increased spending on research and development and marketing, which could strain net margins.
The company is dealing with the implications of international tariffs and manufacturing risks, particularly with their reliance on Taiwan for production, which could affect cost of goods sold and gross margins.
The focus on refresh cycles in the firewall market, while currently driving growth, may not sustain long-term revenue increases if the overall market does not grow substantially as customers eventually sweat assets.
The transition regarding their CNAPP strategy and reliance on partnerships, such as with Wiz, suggests a shift in priority that could temporarily disrupt execution and revenue from this segment.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $223.054 for Check Point Software Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $285.0, and the most bearish reporting a price target of just $173.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.1 billion, earnings will come to $989.0 million, and it would be trading on a PE ratio of 29.6x, assuming you use a discount rate of 10.6%.
Given the current share price of $196.56, the analyst price target of $223.05 is 11.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Check Point Software Technologies?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Emerging AI Partnerships And Cyber Advancements Will Define The Next Security Cycle