Neutral Hold Rating on Check Point Software Amidst Mixed Revenue Performance and Sales Diversification

Check Point (CHKP – Research Report), the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Shrenik Kothari from Robert W. Baird maintained a Hold rating on the stock and has a $168.00 price target.

Shrenik Kothari has given his Hold rating due to a combination of factors surrounding Check Point Software Technologies Ltd. (CHKP). The slight uptick in the company’s Recognized Revenue Obligation (RPO) and current RPO indicates modest growth expectations. However, the revenue performance from different segments reflects a mixed picture, with a notable decline in Network Security Gateways but growth in Security Subscriptions and Software Updates and Maintenance. This suggests a transition within the company’s offerings, yet with some areas underperforming.
Additionally, the level of sales concentration through CHKP’s largest distributors has slightly decreased, which might be indicating diversification in sales channels or a potential risk in sales concentration. The workforce has expanded across various regions and functions, with a particular increase in customer support personnel, indicating investment in service quality and potential growth in customer base. Kothari’s Hold rating appears to be based on these balanced factors that neither strongly suggest an aggressive growth trajectory nor signal a downturn, hence the neutral outlook.

In another report released on March 27, Mizuho Securities 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.