Robert W. Baird analyst Shrenik Kothari has maintained their neutral stance on CHKP stock, giving a Hold rating on January 30.
Geoff Meacham has given his Hold rating due to a combination of factors impacting Check Point Software Technologies Ltd. (CHKP). The company posted financial results that aligned with expectations and provided future guidance closely mirroring consensus estimates. A slight underperformance in billings was noted, attributed to customers’ reluctance to pay upfront, which affected billing durations and introduced timing delays. Meanwhile, Check Point’s subscription revenue experienced a healthy growth of 15%, propelled by robust demand and the ongoing adoption of the Infinity platform. This growth in subscription revenue contrasts with a 9% year-over-year decline in product revenue, although it marks an improvement from a trend of accelerating declines in previous quarters.
Additionally, the announcement that founder and CEO Gil Shwed plans to step down and transition to the role of Executive Chairman introduces potential uncertainty around leadership succession. While the company has initiated the search for a new CEO, the impact of this change on the company’s strategic direction and operations remains to be seen. Financially, Check Point’s operating margins were notably strong, outperforming estimates, and earnings per share exceeded expectations. However, the flat guidance on future revenue and non-GAAP EPS, which is in line with consensus, suggests a cautious outlook on growth, reinforcing the Hold rating.
In another report released on January 30, J.P. Morgan also maintained a Hold rating on the stock with a $160.00 price target.
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Check Point (CHKP) Company Description:
Check Point Software Technologies Ltd. engages in the development and market of software and hardware solutions for information technology security. The company products include threat prevention, next generation firewalls, mobile security, and security management. Its solutions cater to the following: point of sale systems, automated teller machines, private and public cloud, and telecommunications providers. The company was founded by Gil Shwed, Marius Nacht, and Shlomo Kramer in July 1993 and is headquartered in Tel Aviv, Israel.
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