Check Point Software Technologies (CHKP) Margin Expansion To 38.8% Tests Bearish EPS Decline Narrative

Check Point Software Technologies (CHKP) closed out FY 2025 with fourth quarter revenue of US$744.9 million and basic EPS of US$2.85, while full year trailing EPS reached US$9.85 on revenue of US$2.7 billion and earnings grew 25% over the past 12 months. Over the last few reported periods, revenue has moved from US$703.7 million in Q4 2024 to US$744.9 million in Q4 2025, with quarterly basic EPS ranging from US$1.77 in Q1 2025 to US$3.34 in Q3 2025 and trailing net income rising from US$845.7 million to US$1.1 billion as the net margin improved from 33% to 38.8%. With that backdrop, investors are likely to focus on how these stronger margins balance against expectations for a modest decline in forward EPS.

See our full analysis for Check Point Software Technologies.

With the latest results on the table, the next step is to see how these numbers line up with the most common stories around Check Point Software Technologies and where those stories might need updating.

See what the community is saying about Check Point Software Technologies

Margins Stretch To 38.8% On US$2.7b Sales

• Over the last 12 months, Check Point generated US$2.7b in revenue with net income of about US$1.1b, which works out to a 38.8% net margin compared with 33% a year earlier.
• Analysts' consensus view links this higher margin profile to products like Quantum Force appliances and the Infinity platform, which are described as supporting growth, yet forecasts also assume profit margins eventually move down to 29.1%, so investors need to weigh current profitability against those longer term expectations.
  • The consensus narrative points to Infinity contributing over 15% of revenue with double digit growth, while the data here shows earnings rising to US$1.1b on US$2.7b of revenue, which fits with high margin, software heavy sales.
  • At the same time, consensus expects earnings to be about US$957.0m by 2029, which is lower than the current US$1.1b, so the strong 38.8% margin today sits against a projection for lower profitability later on.

Valuation: 14.6x P/E Versus Lower Growth Outlook

• The shares trade on a 14.6x P/E with a current price of US$145.76, which is below the US Software industry average P/E of 29.4x and a peer average of 23.9x, while also sitting about 5% under an indicated DCF fair value of US$153.51.
• Bulls point to this discount as an opportunity, but the growth assumptions behind it are mixed, because forecasts call for a 1.4% average annual EPS decline over the next three years even as analysts see scope for price upside toward a US$203.29 target.
  • On one side, the stock trades below the stated DCF fair value and below industry and peer P/E multiples, which lines up with the view that the market is not fully pricing in the business at US$145.76.
  • On the other, the same dataset flags revenue growth of 5.9% per year versus 10.3% for the broader US market and an EPS decline of 1.4% per year, so the lower P/E and gap to the US$203.29 target are paired with more modest growth forecasts.

Analysts who are bullish on Check Point often start with these valuation gaps and then test how they stack up against the growth and margin forecasts that support their case. 🐂 Check Point Software Technologies Bull Case

25% Earnings Jump Meets 1.4% EPS Decline Forecast

• Trailing 12 month basic EPS is US$9.85, which is described as a 25% gain over the past year and well above the 5 year average annual earnings growth rate of 2.9%, yet the same dataset shows a projected 1.4% annual EPS decline over the next three years.
• Bears focus on that swing from a 25% one year increase to negative EPS growth in forecasts, arguing that current profitability and recent acceleration may not be sustained once firewall refresh cycles ease and competition in areas like SASE and AI ramps up.
  • The risk section highlights expectations for margins to move from 38.8% today to 29.1%, which would be a clear step down from current earnings strength and supports concerns about higher costs or pricing pressure.
  • Forecast revenue growth of 5.9% per year compared with 10.3% for the US market also fits the cautious view that, even with EPS at US$9.85 now, the business could grow more slowly than many peers, which matters if the share price moves closer to the US$203.29 target.

Investors who lean cautious typically use these forecast EPS and margin trends as a cross check on how much weight to give the strong trailing year. 🐻 Check Point Software Technologies Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Check Point Software Technologies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Seeing bullish and cautious points side by side can feel conflicting, so use the numbers to build your own stance and move promptly while the picture is still fresh by weighing up the 4 key rewards and 1 important warning sign

See What Else Is Out There

Check Point pairs a 25% earnings jump with forecasts for a 1.4% annual EPS decline and slower 5.9% revenue growth compared with the broader US market.

If those softer growth expectations give you pause, broaden your watchlist with screener containing 25 high quality undiscovered gems and compare businesses where current fundamentals and forward stories line up more clearly.

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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