Check Point Software Technologies (CHKP): Valuation in Focus After FedRAMP Authorization Expands Federal Market Potential

Check Point Software Technologies (CHKP) just checked a major box on its regulatory to-do list, announcing full FedRAMP authorization for the Infinity Platform for Government. This green light now lets the company’s AI-driven cybersecurity suite be widely adopted across United States federal networks and cloud environments. This milestone highlights Check Point’s credentials for high-stakes compliance and threat prevention. If you’re weighing your next move with CHKP, this development could be significant, especially as cyber threats increase and government agencies look for trusted providers.

Momentum seems to be picking up: CHKP shares are up 7% over the past month and 11% for the year to date, although gains have moderated a bit over the past three months. The company’s returns over one and three years have outperformed many tech peers, and recent analyst recognition for Check Point’s platforms adds an extra boost to sentiment. Investors may be weighing not just this regulatory news but a broader narrative, where federal cybersecurity spending is growing and Check Point is well-positioned to capture more of the action.

But in a market that often looks ahead, is CHKP’s current price setting up a genuine buying window, or have investors already priced in future growth from its FedRAMP win and strong fundamentals?

Most Popular Narrative: 8% Undervalued

The dominant narrative suggests Check Point Software Technologies is trading at an 8% discount to fair value. This points toward a potential opportunity for investors willing to embrace its forward-looking fundamentals.

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, which supports expectations for revenue growth through enhanced customer retention and cross-selling opportunities.

Curious about what is powering this valuation? There's more than meets the eye. Underlying this fair value are bold earnings forecasts and a future multiple that only a handful of companies can justify. Want to know if high analyst expectations and strategic growth bets are baked into the target price? Dive beneath the surface and see what projections lie at the heart of this narrative's upside.

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 pressure margins and create challenges for Check Point’s ability to sustain its expected growth trajectory.

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

Another View: Discounted Cash Flow Suggests a Different Story

Looking through the lens of the SWS DCF model changes the picture. Instead of seeing Check Point Software Technologies as undervalued, this approach values the company higher than its current trading price. This result casts doubt on the previous upside. Which measure really captures the company's potential?

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 these outlooks don’t quite fit your perspective or you’d rather chart your own course, you can analyze the numbers yourself in just a few minutes, then 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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