NasdaqGS:CHKP

Stock Analysis Report

Check Point Software Technologies

Executive Summary

Check Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide.

Rewards

Trading at 6.8% below its fair value

Earnings have grown 5% per year over the past 5 years

Risk Analysis

No risks detected for CHKP from our risk checks.


Snowflake Analysis

Flawless balance sheet with acceptable track record.


Similar Companies

Share Price & News

How has Check Point Software Technologies's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CHKP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

7.0%

CHKP

-1.4%

US Software

2.4%

US Market


1 Year Return

-16.3%

CHKP

8.6%

US Software

-10.0%

US Market

Return vs Industry: CHKP underperformed the US Software industry which returned 7.1% over the past year.

Return vs Market: CHKP underperformed the US Market which returned -13.3% over the past year.


Shareholder returns

CHKPIndustryMarket
7 Day7.0%-1.4%2.4%
30 Day14.6%-7.7%-11.0%
90 Day-5.9%-7.8%-19.4%
1 Year-16.3%-16.3%9.8%8.6%-8.1%-10.0%
3 Year1.1%1.1%104.2%95.6%17.3%9.6%
5 Year24.3%24.3%169.6%150.6%36.1%21.1%

Price Volatility Vs. Market

How volatile is Check Point Software Technologies's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Check Point Software Technologies undervalued compared to its fair value and its price relative to the market?

6.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CHKP ($103.58) is trading below our estimate of fair value ($111.17)

Significantly Below Fair Value: CHKP is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: CHKP is good value based on its PE Ratio (18.9x) compared to the Software industry average (39x).

PE vs Market: CHKP is poor value based on its PE Ratio (18.9x) compared to the US market (12.5x).


Price to Earnings Growth Ratio

PEG Ratio: CHKP is poor value based on its PEG Ratio (13.6x)


Price to Book Ratio

PB vs Industry: CHKP is overvalued based on its PB Ratio (4.2x) compared to the US Software industry average (4x).


Next Steps

Future Growth

How is Check Point Software Technologies forecast to perform in the next 1 to 3 years based on estimates from 30 analysts?

1.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CHKP's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: CHKP's earnings (1.4% per year) are forecast to grow slower than the US market (13.4% per year).

High Growth Earnings: CHKP's earnings are forecast to grow, but not significantly.

Revenue vs Market: CHKP's revenue (1.4% per year) is forecast to grow slower than the US market (7% per year).

High Growth Revenue: CHKP's revenue (1.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CHKP's Return on Equity is forecast to be high in 3 years time (32.8%)


Next Steps

Past Performance

How has Check Point Software Technologies performed over the past 5 years?

5.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CHKP has high quality earnings.

Growing Profit Margin: CHKP's current net profit margins (41.4%) are lower than last year (42.9%).


Past Earnings Growth Analysis

Earnings Trend: CHKP's earnings have grown by 5% per year over the past 5 years.

Accelerating Growth: CHKP's earnings growth over the past year (0.5%) is below its 5-year average (5% per year).

Earnings vs Industry: CHKP earnings growth over the past year (0.5%) underperformed the Software industry 18.4%.


Return on Equity

High ROE: CHKP's Return on Equity (23.1%) is considered high.


Next Steps

Financial Health

How is Check Point Software Technologies's financial position?


Financial Position Analysis

Short Term Liabilities: CHKP's short term assets ($2.1B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: CHKP's short term assets ($2.1B) exceed its long term liabilities ($799.4M).


Debt to Equity History and Analysis

Debt Level: CHKP is debt free.

Reducing Debt: CHKP has not had any debt for past 5 years.

Debt Coverage: CHKP has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: CHKP has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Check Point Software Technologies's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate CHKP's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate CHKP's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CHKP's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CHKP's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CHKP's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure


CEO

Gil Shwed (50yo)

26.75s

Tenure

US$28,800

Compensation

Mr. Gil Shwed is a Co-founder of Check Point Software Technologies Ltd. Mr. Shwed has been Chief Executive Officer of Check Point Software Technologies Ltd. since July 1993 and served as its Executive Chai ...


CEO Compensation Analysis

Compensation vs Market: Gil's total compensation ($USD28.80K) is below average for companies of similar size in the US market ($USD11.96M).

Compensation vs Earnings: Gil's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Gil Shwed
Founder26.75yrsUS$28.80k17.16% $2.6b
Tal Payne
Chief Financial & Operations Officer12.25yrsUS$772.40kno data
Miryam Steinitz
Head of Human Resourcesno dataUS$400.40kno data
Dan Yerushalmi
Chief Customer Officer1.75yrsUS$557.10kno data
Marius Nacht
Co-Founder & Non-Executive Chairman4.58yrsno data4.3% $657.4m
Kip Meintzer
Head of Global Investor Relationsno datano datano data
John Slavitt
General Counselno datano datano data
Peter Alexander
Chief Marketing Officer1.5yrsno datano data
Chris Scanlan
President of Americas Sales0.75yrno datano data
Erez Yarkoni
Head of Telecom & Cloud Sales0.75yrno datano data

1.6yrs

Average Tenure

50yo

Average Age

Experienced Management: CHKP's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Gil Shwed
Founder26.75yrsUS$28.80k17.16% $2.6b
Marius Nacht
Co-Founder & Non-Executive Chairman4.58yrsno data4.3% $657.4m
Ray Rothrock
Independent Director25.25yrsno datano data
Irwin Federman
Independent Director25.25yrsno datano data
Jerry Ungerman
Vice Chairman of the Board15.08yrsno datano data
Yoav Chelouche
Independent Director14.25yrsno datano data
Guy Gecht
Independent Director14.25yrsno datano data
Tal Shavit
Independent Director20.25yrsno datano data
Dan Propper
Independent Director14.25yrsno datano data
Shai Weiss
Independent Director1.33yrsno datano data

14.7yrs

Average Tenure

63yo

Average Age

Experienced Board: CHKP's board of directors are seasoned and experienced ( 14.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Check Point Software Technologies Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Check Point Software Technologies Ltd.
  • Ticker: CHKP
  • Exchange: NasdaqGS
  • Founded: 1993
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: US$15.298b
  • Shares outstanding: 145.50m
  • Website: https://www.checkpoint.com

Number of Employees


Location

  • Check Point Software Technologies Ltd.
  • 5 Shlomo Kaplan Street
  • Tel Aviv
  • 6789159
  • Israel

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHKPNasdaqGS (Nasdaq Global Select)YesOrdinary SharesUSUSDJun 1996
CPWDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 1996
CHKP NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJun 1996
CHKPWBAG (Wiener Boerse AG)YesOrdinary SharesATEURJun 1996
C1HK34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Check Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide. The company offers a portfolio of network security, endpoint security, data security, and management solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against 5th generation mega cyber-attacks across various networks, endpoint, cloud, and mobile; security gateways from platforms for small business and small office locations, high end and high demanding data centers, and perimeter environments; and Check Point SandBlast family for threat prevention and zero-day protections. The company also offers Check Point CloudGuard cloud security product that delivers threat prevention security for enterprise cloud networks, data, and applications; Check Point SandBlast Mobile for mobile security in iOS and Android devices; and Check Point Security Management, which offers security management through a single console that streamlines security operations and provides visibility into policy administration and threat analysis. In addition, the company provides technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services. It sells its products and services to enterprises, service providers, small and medium sized businesses, and consumers through a network of channel partners, such as distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was founded in 1993 and is headquartered in Tel Aviv, Israel. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 07:00
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.