Check Point Software Technologies (CHKP): Assessing Valuation Following Shelf Registration and Enterprise Browser Launch

If you’re tracking Check Point Software Technologies (CHKP), the past week has brought some action that’s likely caught your attention. The company just filed a shelf registration for up to $295 million in new shares, signaling moves that could alter its capital structure or set it up for future acquisitions or investments. At the same time, Check Point rolled out its new Enterprise Browser feature, aiming to plug security holes for remote and third-party users. This is a timely solution for the realities of hybrid work. These developments put both financial flexibility and product innovation in the spotlight, giving investors plenty to consider.

Against this backdrop, Check Point’s share price has edged up around 8% year to date, but the picture is more mixed over the past three months, where the stock has slipped almost 9%. Over the longer term, however, momentum is positive. A three-year gain of 71% stands out, even as shorter-term moves reflect competing views on risk and growth. The recent boardroom hire, a new Chief Marketing Officer, adds another layer to the growth narrative. It is the shelf registration and fresh product launch that stand out as potential turning points.

With Check Point mixing fresh capital options and targeted innovation, the market may be considering whether the value on offer is underestimated or if enthusiasm for future growth is already fully reflected in the price.

Most Popular Narrative: 10.9% Undervalued

According to the most popular narrative, Check Point Software Technologies is currently undervalued by 10.9%, based on a blend of future earnings growth, evolving profit margins, and anticipated competitive advantages.

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.

Investors, are you curious what makes experts so bullish about Check Point’s upside? Dive into the details of their key growth assumptions, including future profit margins and ambitious revenue projections. These are the building blocks behind that full-value estimate. See what the narrative is betting on.

Result: Fair Value of $223.05 (UNDERVALUED)

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

However, persistent macroeconomic volatility or intensifying competition in AI and SASE could affect the outlook and pose challenges to Check Point’s projected growth path.

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

Another View: What Does the SWS DCF Model Suggest?

While the main valuation points to undervaluation, our DCF model instead signals that Check Point may be overpriced in the current market. The difference raises fresh questions about which assumptions hold up. Are growth projections too generous?

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 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 you have a different perspective or want to weigh the data yourself, you can quickly put together your own narrative and see where it leads. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Check Point Software Technologies.

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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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