Check Point Software Technologies Ltd (NASDAQ: CHKP)

Sector: Technology Industry: Software - Infrastructure CIK: 0001015922
Market Cap 20.77 Bn
P/B 6.74
P/E 20.56
P/S 7.74
ROIC (Qtr) 45.39
Div Yield % 0.00
Rev 1y % (Qtr) 6.68
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00

About

Check Point Software Technologies Ltd (CHKP) is a prominent player in the cybersecurity industry, providing security solutions for various types of organizations across 88 countries. The company's main business activities involve delivering collaborative security across an organization's security architecture, including the network, cloud, and workspace. Check Point's product and service offerings are designed to provide threat prevention, detection, and response capabilities. Check Point's revenue is generated primarily through its comprehensive...

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 1.13B exceeds capital expenditure of 25.90M by 43.69x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 3.77B provides 11.84x coverage of working capital 318.50M, indicating strong operational backing.
  • Long-term investments of 1.35B provide solid 4.23x backing of working capital 318.50M, showing strategic capital allocation.
  • Operating cash flow of 1.16B provides solid 0.68x coverage of current liabilities 1.71B, showing strong operational health.
  • Retained earnings of 14.77B provide strong 8.85x coverage of other current liabilities 1.67B, indicating earnings quality.

Bear case

  • Investment activities of 34.40M provide weak support for R&D spending of 433.50M, which is 0.08x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 1.16B provides insufficient coverage of deferred revenue obligations of 1.89B, which is 0.61x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 1.16B provides minimal -23.92x coverage of tax expenses of (48.40M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Long-term investments of 1.35B represent a high 16.22x of fixed assets 83.10M, indicating potential overexposure to financial assets versus operational capabilities.
  • Tax assets of 62.40M provide limited offset against tax liabilities of 304.70M, which is 0.20x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.54 2.69
EV to Cash from Ops. EV/CFO 17.41 28.91
EV to Debt EV to Debt 0.00 19.83
EV to EBIT EV/EBIT 20.96 -9.95
EV to EBITDA EV/EBITDA 21.15 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 17.81 26.09
EV to Market Cap EV to Market Cap 0.97 0.36
EV to Revenue EV/Rev 7.51 -9.34
Price to Book Value [P/B] P/B 6.74 3.88
Price to Earnings [P/E] P/E 20.56 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Interest Coverage 0.00 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -15.62 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 13.99 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 20.60 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.24 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -0.21 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -0.21 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 25.60 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 10.68 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.23 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.47 0.67
Cash Payout Ratio Cash Payout Ratio 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.36 1.22
Current Ratio Curr Ratio (Qtr) 1.19 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -0.96
Interest Cover Ratio Interest Cover Ratio 0.00 -14.20
Times Interest Earned Times Interest Earned 0.00 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.60 -548.16
EBIT Margin % EBIT Margin % (Qtr) 35.82 -199.84
EBT Margin % EBT Margin % (Qtr) 35.82 -607.20
Gross Margin % Gross Margin % (Qtr) 86.80 51.88
Net Profit Margin % Net Margin % (Qtr) 37.60 -610.00