CHECK POINT SOFTWARE TECH (CHKP)
IL0010824113 - Common Stock
We assign a fundamental rating of 7 out of 10 to CHKP. CHKP was compared to 277 industry peers in the Software industry. CHKP scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CHKP is not valued too expensively and it also shows a decent growth rate. These ratings could make CHKP a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year CHKP was profitable.
In the past year CHKP had a positive cash flow from operations.
In the past 5 years CHKP has always been profitable.
Each year in the past 5 years CHKP had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 15.26%, CHKP belongs to the top of the industry, outperforming 92.75% of the companies in the same industry.
With an excellent Return On Equity value of 30.36%, CHKP belongs to the best of the industry, outperforming 93.48% of the companies in the same industry.
The Return On Invested Capital of CHKP (20.61%) is better than 96.01% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CHKP is significantly above the industry average of 10.18%.
The last Return On Invested Capital (20.61%) for CHKP is above the 3 year average (19.55%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.26% | ||
| ROE | 30.36% | ||
| ROIC | 20.61% |
ROA(3y)14.17%
ROA(5y)14.26%
ROE(3y)27.34%
ROE(5y)25.92%
ROIC(3y)19.55%
ROIC(5y)18.82%
1.3 Margins
CHKP has a Profit Margin of 34.33%. This is amongst the best in the industry. CHKP outperforms 96.01% of its industry peers.
In the last couple of years the Profit Margin of CHKP has declined.
The Operating Margin of CHKP (36.50%) is better than 98.55% of its industry peers.
In the last couple of years the Operating Margin of CHKP has declined.
The Gross Margin of CHKP (88.34%) is better than 95.29% of its industry peers.
In the last couple of years the Gross Margin of CHKP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.5% | ||
| PM (TTM) | 34.33% | ||
| GM | 88.34% |
OM growth 3Y-5.26%
OM growth 5Y-4.83%
PM growth 3Y-5.32%
PM growth 5Y-4.08%
GM growth 3Y-0.28%
GM growth 5Y-0.27%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CHKP is creating value.
Compared to 1 year ago, CHKP has less shares outstanding
CHKP has less shares outstanding than it did 5 years ago.
CHKP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 8.17 indicates that CHKP is not in any danger for bankruptcy at the moment.
CHKP's Altman-Z score of 8.17 is amongst the best of the industry. CHKP outperforms 82.61% of its industry peers.
CHKP has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 8.17 |
ROIC/WACC2.29
WACC9.01%
2.3 Liquidity
CHKP has a Current Ratio of 1.16. This is a normal value and indicates that CHKP is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.16, CHKP is doing worse than 70.65% of the companies in the same industry.
A Quick Ratio of 1.16 indicates that CHKP should not have too much problems paying its short term obligations.
CHKP's Quick ratio of 1.16 is on the low side compared to the rest of the industry. CHKP is outperformed by 68.84% of its industry peers.
CHKP does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.32% over the past year.
The Earnings Per Share has been growing by 8.05% on average over the past years. This is quite good.
Looking at the last year, CHKP shows a small growth in Revenue. The Revenue has grown by 3.99% in the last year.
Measured over the past years, CHKP shows a small growth in Revenue. The Revenue has been growing by 4.73% on average per year.
EPS 1Y (TTM)13.32%
EPS 3Y7.42%
EPS 5Y8.05%
EPS growth Q2Q13.33%
Revenue 1Y (TTM)3.99%
Revenue growth 3Y5.35%
Revenue growth 5Y4.73%
Revenue growth Q2Q5.76%
3.2 Future
CHKP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.29% yearly.
Based on estimates for the next years, CHKP will show a small growth in Revenue. The Revenue will grow by 7.70% on average per year.
EPS Next Y9.6%
EPS Next 2Y10.04%
EPS Next 3Y11.58%
EPS Next 5Y10.29%
Revenue Next Year5.97%
Revenue Next 2Y5.65%
Revenue Next 3Y5.72%
Revenue Next 5Y7.7%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.41, CHKP is valued on the expensive side.
Based on the Price/Earnings ratio, CHKP is valued cheaply inside the industry as 87.68% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.60, CHKP is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 14.79, the valuation of CHKP can be described as correct.
Based on the Price/Forward Earnings ratio, CHKP is valued cheaply inside the industry as 88.04% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.15, CHKP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.41 | ||
| Fwd PE | 14.79 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CHKP is valued cheaply inside the industry as 88.77% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, CHKP is valued cheaper than 87.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.64 | ||
| EV/EBITDA | 15.13 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CHKP does not grow enough to justify the current Price/Earnings ratio.
CHKP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.81
PEG (5Y)2.16
EPS Next 2Y10.04%
EPS Next 3Y11.58%
5. Dividend
5.1 Amount
CHKP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CHECK POINT SOFTWARE TECH
NASDAQ:CHKP (5/17/2024, 7:00:00 PM)
After market: 151.13 0 (0%)151.13
+0.03 (+0.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap17.06B
Analysts
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Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.41 | ||
| Fwd PE | 14.79 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.81
PEG (5Y)2.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.26% | ||
| ROE | 30.36% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 36.5% | ||
| PM (TTM) | 34.33% | ||
| GM | 88.34% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.16 | ||
| Quick Ratio | 1.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)13.32%
EPS 3Y7.42%
EPS 5Y
EPS growth Q2Q
EPS Next Y9.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.99%
Revenue growth 3Y5.35%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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