A Look at Check Point Software Technologies's (CHKP) Valuation Following Microsoft AI Security Collaboration

Check Point Software Technologies (CHKP) just announced a new collaboration with Microsoft, bringing its AI security tools directly into Microsoft Copilot Studio. This partnership aims to enhance protection, compliance, and governance for enterprises using generative AI agents.

See our latest analysis for Check Point Software Technologies.

This latest collaboration is another strong signal that Check Point Software Technologies is leaning into AI-driven security, aiming to stay ahead as enterprises increasingly embrace generative AI. While the recent 30-day share price return saw a dip of 6.56%, the stock has still managed a 1.29% total shareholder return over the past year. This momentum is supported by a robust 38% three-year total return. It is a case of near-term volatility in a company with a history of delivering for long-term shareholders.

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With the shares now trading nearly 24% below the average analyst price target and long-term returns still positive, investors may wonder whether Check Point Software Technologies is an overlooked value or if the market has already taken its future growth prospects into account.

Most Popular Narrative: 19% Undervalued

Check Point Software Technologies closed at $184.34, while the narrative-supported fair value stands at $228.40. The gap between consensus projections and market price sets the stage for a compelling catalyst that could sway sentiment.

The Infinity platform continues to gain traction, with strong double-digit revenue growth and increased customer adoption. The platform now accounts for over 15% of total revenue. This supports expectations for revenue growth through enhanced customer retention and cross-selling opportunities.

Read the complete narrative.

Want to know what powers this bull case? The narrative hints at ongoing platform adoption, ambitious future profitability, and a rare financial formula often reserved for top-tier tech. What bold projections are baked into that fair value? The answers lie just beneath the surface.

Result: Fair Value of $228.40 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, it's worth noting that intense competition and potential margin pressures could quickly challenge or even invalidate the current bullish outlook.

Find out about the key risks to this Check Point Software Technologies narrative.

Another View: SWS DCF Model Suggests a Different Story

While the narrative-backed consensus points to Check Point Software Technologies being undervalued, our SWS DCF model arrives at a more conservative outcome. According to this model, the current share price of $184.34 actually exceeds the estimated fair value of $167.70. This means the DCF approach sees the stock as overvalued, which is in stark contrast to the optimism built into market expectations. Which method better captures the company’s true position and future prospects?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Check Point Software Technologies for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 923 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Check Point Software Technologies Narrative

If the current outlook doesn't match your perspective, you're invited to explore the figures yourself and craft a custom story in just a couple minutes. Do it your way

A great starting point for your Check Point Software Technologies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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