Wells Fargo has revised its price target for Check Point (CHKP, Financial), reducing it from $280 to $265 while maintaining an Overweight rating on the company's shares. Despite a recent drop in share price, Check Point delivered a robust quarterly performance and met guidance expectations. The firm's analysis highlights that a significant portion of the company's performance was driven by its hardware segment, which is thriving in a competitive market.
Wells Fargo remains optimistic about Check Point's financial health, particularly pointing to the company's free cash flow, which is anticipated to increase at a low-teens rate this year. This projected growth continues to offer strong support for the company's valuation. As Check Point navigates a space with many competitors, its steady cash flow positions it favorably for sustained performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 31 analysts, the average target price for Check Point Software Technologies Ltd (CHKP, Financial) is $235.92 with a high estimate of $285.00 and a low estimate of $164.14. The average target implies an upside of 15.33% from the current price of $204.56. More detailed estimate data can be found on the Check Point Software Technologies Ltd (CHKP) Forecast page.
Based on the consensus recommendation from 40 brokerage firms, Check Point Software Technologies Ltd's (CHKP, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Check Point Software Technologies Ltd (CHKP, Financial) in one year is $185.42, suggesting a downside of 9.36% from the current price of $204.56. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Check Point Software Technologies Ltd (CHKP) Summary page.
CHKP Key Business Developments
Release Date: January 30, 2025
- Quarterly Revenue: $704 million, $9 million above the midpoint of projections.
- Annual Revenue: $2.565 billion, $50 million above the midpoint of projections.
- Non-GAAP EPS (Quarterly): $2.70, at the top end of projections.
- Non-GAAP EPS (Annual): $9.60, 9% growth, $0.16 above the midpoint of projections.
- Deferred Revenues Growth: 5% to $2 billion.
- Calculated Billings Growth: 11% to $959 million.
- Gross Margin: 89%, similar to last year.
- Operating Expenses: $317 million, 12% increase year-over-year.
- Operating Income: $306 million, 44% operating margin.
- Non-GAAP Net Income (Quarterly): $303 million, 2% growth.
- GAAP Net Income (Quarterly): $258 million, 7% increase.
- Operating Cash Flow (Quarterly): $249 million, 6% increase.
- Annual Operating Cash Flow: $1.059 billion.
- Share Buyback (Q4): $325 million.
- Share Buyback (Annual): $1.3 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Check Point Software Technologies Ltd (CHKP, Financial) reported strong financial performance with revenues reaching $704 million, surpassing projections.
- The company's non-GAAP EPS was $2.70, at the top end of projections, indicating strong profitability.
- There was a significant demand for Quantum Force appliances, contributing to an 8% growth in revenues.
- The Infinity platform saw strong adoption, with double-digit growth in agreements.
- All geographical regions experienced double-digit growth in new business bookings, reflecting widespread demand.
Negative Points
- Operating expenses increased by 12% due to continued investment in the go-to-market strategy and the acquisition of Cyberint.
- The company's non-GAAP tax rate was around 8%, influenced by global tax assessments, which could impact future financials.
- Despite strong bookings, the revenue guidance for fiscal 2025 is only 6%, indicating potential challenges in sustaining high growth.
- The transition to a new CEO may introduce uncertainties as the company adjusts to new leadership and strategic directions.
- The competitive landscape, particularly in the US, remains challenging, requiring reinvigoration of growth strategies.
