Fact based stock research
Check Point Software (NasdaqGS:CHKP)

IL0010824113

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Check Point Software stock research in summary

checkpoint.com

ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Check Point Software (Systems Software, USA) shares have lower financial characteristics compared with similar stocks. Shares of Check Point Software are low in value (priced high) with a consolidated Value Rank of 42 (worse than 58% of alternatives), show below-average growth (Growth Rank of 26), and are riskily financed (Safety Rank of 19), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 1, is a sell recommendation based on Check Point Software's financial characteristics. As the company Check Point Software's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 42), low growth (Obermatt Growth Rank of 26), and risky financing practices (Obermatt Safety Rank of 19), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	42
Growth Rank	26
Safety Rank	19
Combined Rank	1

Country	USA
Industry	Systems Software
Index	Human Rights, SDG 12, SDG 16, SDG 4, SDG 8, SDG 9, NASDAQ 100, NASDAQ
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Check Point Software

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	51	49	40	42
GROWTH
GROWTH	31	29	27	26
SAFETY
SAFETY	71	96	96	19
SENTIMENT
SENTIMENT	n/a	35	53	^new
360° VIEW
360° VIEW	n/a	28	31	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Check Point Software is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	51	49	40	42
GROWTH
GROWTH	31	29	27	26
SAFETY
SAFETY	71	96	96	19
COMBINED
COMBINED	60	76	76	1

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Check Point Software the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 42 (worse than 58% compared with alternatives), Check Point Software shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Check Point Software. Price-to-Profit (also referred to as price-earnings, P/E) is 84 which means that the stock price compared with what market professionals expect for future profits is lower than for 84% of comparable companies, indicating a good value concerning Check Point Software's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 51, which means that the stock price is lower as regards to invested capital than for 51% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 63% of alternatives (only 37% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 42, is a hold recommendation based on Check Point Software's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	51	38	40	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	92	76	78	84
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	45	54	47	51
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	51	49	40	42

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Check Point Software; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 26 (better than 26% compared with alternatives), Check Point Software shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Check Point Software. Capital Growth has a rank of 50, which means that currently professionals expect the company to grow its invested capital more than 25% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 54 (above 54% of alternative investments). But Sales Growth has only a rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Profit Growth is also low at a rank of 25. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 26, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Check Point Software, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	17	5	26	23
PROFIT GROWTH
PROFIT GROWTH	50	44	26	25
CAPITAL GROWTH
CAPITAL GROWTH	n/a	58	55	50
STOCK RETURNS
STOCK RETURNS	51	63	39	54
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	31	29	27	26

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Check Point Software.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 19 (better than 19% compared with alternatives), the company Check Point Software has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Check Point Software is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Check Point Software and the other two below average. Leverage is at a rank of 100 meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 22, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 78% of its competitors. Liquidity is at a rank of 1, meaning that the company generates less profit to service its debt than 99% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 19 (worse than 81% compared with alternatives), Check Point Software has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Check Point Software are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Check Point Software and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	88	100	100	100
REFINANCING
REFINANCING	8	39	29	22
LIQUIDITY
LIQUIDITY	94	69	69	1
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	71	96	96	19

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Check Point Software and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	8	22	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	49	52	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	99	92	^new
MARKET PULSE
MARKET PULSE	n/a	32	39	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	53	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Check Point Software.
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