Market Overview

2017 May Finally Be The Year The Market Takes A Liking To Check Point Software

2017 May Finally Be The Year The Market Takes A Liking To Check Point Software

Check Point Software Technologies Ltd. (NASDAQ: CHKP) reported its Q4 2016 results ahead of expectations. While 2016 had been a “tough year for security stocks as a whole,” discounting issues seemed to be fading, software blade revenue was accelerating and the company’s tone has become more positive, JPMorgan’s Sterling Auty said in a report.

Auty upgraded the rating on Check Point Software from Neutral to Overweight, while raising the price target from $91 to $115. He mentioned that the market could re-rate the company’s shares higher “on cash flow multiples similar to” those of Aspen Technology, Inc. (NASDAQ: AZPN), Cadence Design Systems Inc (NASDAQ: CDNS), Amdocs Limited (NASDAQ: DOX) and “other more mature, slower growing, but solid cash flow generators.”

Q4 Results

Check Point Software delivered a beat in its top and bottom line. Revenue came in at $486.7 million, versus JPMorgan’s estimate of $477.6 million and the Street’s $477.4 million. Non-GAAP EPS was reported at $1.46, versus JPMorgan’s estimate of $1.24 and the Street’s $1.25.

“Excluding the positive impact from taxes, the beat on the bottom line by 6 cents is still impressive,” Auty noted.

Expectations For 2017

Security companies had witnessed a tough year in 2016 and Check Point Software’s stock had underperformed the S&P 500.

“Discounting on maintenance contracts is expected fade away completely by the end of the year [...] Management plans to invest in S&M and R&D to grab the opportunity existing in the market, especially in the cloud, mobile, and threat prevention that are the focus areas for the company in 2017. However, lower tax rate is more than offsetting the impact from investments leading to EPS topping our previous estimates by 16 cents,” the analyst wrote.

Check Point shares closed Thursday trading at $96.34.

Image Credit: By דוד שי (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

Latest Ratings for CHKP

Nov 2020KeyBancInitiates Coverage OnSector Weight
Oct 2020Goldman SachsUpgradesSellNeutral
Oct 2020Morgan StanleyMaintainsUnderweight

View More Analyst Ratings for CHKP
View the Latest Analyst Ratings


Related Articles (CHKP)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings Long Ideas News Guidance Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

HYMCBMO CapitalInitiates Coverage On
DEMorgan StanleyMaintains335.0
SBNYRaymond JamesMaintains138.0
CORTHC Wainwright & Co.Maintains32.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at