CHECK POINT SOFTWARE TECH (CHKP) Stock Fundamental Analysis
NASDAQ:CHKP - Nasdaq - IL0010824113 - Common Stock - Currency: USD
Overall CHKP gets a fundamental rating of 7 out of 10. We evaluated CHKP against 282 industry peers in the Software industry. Both the health and profitability get an excellent rating, making CHKP a very profitable company, without any liquidiy or solvency issues. CHKP has a correct valuation and a medium growth rate. These ratings would make CHKP suitable for quality investing!
1. Profitability
1.1 Basic Checks
In the past year CHKP was profitable.
CHKP had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 15.34%, CHKP belongs to the best of the industry, outperforming 91.49% of the companies in the same industry.
The Return On Equity of CHKP (31.02%) is better than 91.13% of its industry peers.
CHKP has a Return On Invested Capital of 20.13%. This is amongst the best in the industry. CHKP outperforms 93.97% of its industry peers.
CHKP had an Average Return On Invested Capital over the past 3 years of 20.07%. This is significantly above the industry average of 12.28%.
The 3 year average ROIC (20.07%) for CHKP is below the current ROIC(20.13%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.34% | ||
| ROE | 31.02% | ||
| ROIC | 20.13% |
ROA(3y)14.46%
ROA(5y)14.34%
ROE(3y)29.1%
ROE(5y)27.36%
ROIC(3y)20.07%
ROIC(5y)19.43%
1.3 Margins
The Profit Margin of CHKP (32.75%) is better than 95.39% of its industry peers.
CHKP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 33.70%, CHKP belongs to the top of the industry, outperforming 96.10% of the companies in the same industry.
In the last couple of years the Operating Margin of CHKP has declined.
With an excellent Gross Margin value of 87.23%, CHKP belongs to the best of the industry, outperforming 95.04% of the companies in the same industry.
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 | 33.7% | ||
| PM (TTM) | 32.75% | ||
| GM | 87.23% |
OM growth 3Y-6.58%
OM growth 5Y-5.03%
PM growth 3Y-4.32%
PM growth 5Y-4.45%
GM growth 3Y-0.2%
GM growth 5Y-0.37%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), CHKP is creating value.
CHKP has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CHKP has been reduced compared to 5 years ago.
There is no outstanding debt for CHKP. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 9.71 indicates that CHKP is not in any danger for bankruptcy at the moment.
CHKP has a better Altman-Z score (9.71) than 83.69% 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 | 9.71 |
ROIC/WACC2.07
WACC9.74%
2.3 Liquidity
CHKP has a Current Ratio of 1.10. This is a normal value and indicates that CHKP is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CHKP (1.10) is worse than 69.86% of its industry peers.
A Quick Ratio of 1.10 indicates that CHKP should not have too much problems paying its short term obligations.
The Quick ratio of CHKP (1.10) is worse than 68.79% 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 | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.49% over the past year.
The Earnings Per Share has been growing by 8.26% on average over the past years. This is quite good.
CHKP shows a small growth in Revenue. In the last year, the Revenue has grown by 6.40%.
Measured over the past years, CHKP shows a small growth in Revenue. The Revenue has been growing by 5.16% on average per year.
EPS 1Y (TTM)7.49%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%8.33%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.51%
3.2 Future
Based on estimates for the next years, CHKP will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.82% on average per year.
CHKP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.81% yearly.
EPS Next Y10.16%
EPS Next 2Y9.78%
EPS Next 3Y10.56%
EPS Next 5Y11.82%
Revenue Next Year6.05%
Revenue Next 2Y5.95%
Revenue Next 3Y6.06%
Revenue Next 5Y6.81%
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 23.65, CHKP is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of CHKP indicates a somewhat cheap valuation: CHKP is cheaper than 75.89% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.51, CHKP is valued at the same level.
A Price/Forward Earnings ratio of 19.99 indicates a rather expensive valuation of CHKP.
76.60% of the companies in the same industry are more expensive than CHKP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 35.58. CHKP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 19.99 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CHKP is valued cheaply inside the industry as 80.85% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CHKP indicates a somewhat cheap valuation: CHKP is cheaper than 79.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.73 | ||
| EV/EBITDA | 22.22 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CHKP has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.33
PEG (5Y)2.86
EPS Next 2Y9.78%
EPS Next 3Y10.56%
5. Dividend
5.1 Amount
CHKP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
220.68
+5.18 (+2.4%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners69.63%
Inst Owner Change0%
Ins Owners22.96%
Ins Owner ChangeN/A
Market Cap23.92B
Analysts72.61
Price Target241.1 (9.25%)
Short Float %4.24%
Short Ratio4.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-0.58%
Min EPS beat(2)-0.88%
Max EPS beat(2)-0.28%
EPS beat(4)0
Avg EPS beat(4)-1.14%
Min EPS beat(4)-1.99%
Max EPS beat(4)-0.28%
EPS beat(8)3
Avg EPS beat(8)0.11%
EPS beat(12)6
Avg EPS beat(12)0.65%
EPS beat(16)10
Avg EPS beat(16)0.91%
Revenue beat(2)0
Avg Revenue beat(2)-1.48%
Min Revenue beat(2)-1.71%
Max Revenue beat(2)-1.24%
Revenue beat(4)0
Avg Revenue beat(4)-1.54%
Min Revenue beat(4)-1.92%
Max Revenue beat(4)-1.24%
Revenue beat(8)0
Avg Revenue beat(8)-1.54%
Revenue beat(12)0
Avg Revenue beat(12)-1.44%
Revenue beat(16)1
Avg Revenue beat(16)-1.24%
PT rev (1m)0.14%
PT rev (3m)-0.01%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-0.01%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)-0.25%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-0.59%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.65 | ||
| Fwd PE | 19.99 | ||
| P/S | 9.18 | ||
| P/FCF | 21.73 | ||
| P/OCF | 21.24 | ||
| P/B | 8.7 | ||
| P/tB | 27.47 | ||
| EV/EBITDA | 22.22 |
EPS(TTM)9.33
EY4.23%
EPS(NY)11.04
Fwd EY5%
FCF(TTM)10.16
FCFY4.6%
OCF(TTM)10.39
OCFY4.71%
SpS24.03
BVpS25.36
TBVpS8.03
PEG (NY)2.33
PEG (5Y)2.86
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.34% | ||
| ROE | 31.02% | ||
| ROCE | 23.26% | ||
| ROIC | 20.13% | ||
| ROICexc | 32.87% | ||
| ROICexgc | 175.37% | ||
| OM | 33.7% | ||
| PM (TTM) | 32.75% | ||
| GM | 87.23% | ||
| FCFM | 42.27% |
ROA(3y)14.46%
ROA(5y)14.34%
ROE(3y)29.1%
ROE(5y)27.36%
ROIC(3y)20.07%
ROIC(5y)19.43%
ROICexc(3y)33.25%
ROICexc(5y)32.25%
ROICexgc(3y)125.28%
ROICexgc(5y)97.86%
ROCE(3y)23.18%
ROCE(5y)22.45%
ROICexcg growth 3Y30.18%
ROICexcg growth 5Y26.49%
ROICexc growth 3Y-0.42%
ROICexc growth 5Y2.59%
OM growth 3Y-6.58%
OM growth 5Y-5.03%
PM growth 3Y-4.32%
PM growth 5Y-4.45%
GM growth 3Y-0.2%
GM growth 5Y-0.37%
F-Score7
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 28.78% | ||
| Cap/Sales | 0.96% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 116.7% | ||
| Profit Quality | 129.1% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 9.71 |
F-Score7
WACC9.74%
ROIC/WACC2.07
Cap/Depr(3y)43.08%
Cap/Depr(5y)50.45%
Cap/Sales(3y)0.89%
Cap/Sales(5y)0.87%
Profit Quality(3y)125.99%
Profit Quality(5y)131.69%
High Growth Momentum
Growth
EPS 1Y (TTM)7.49%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%8.33%
EPS Next Y10.16%
EPS Next 2Y9.78%
EPS Next 3Y10.56%
EPS Next 5Y11.82%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.51%
Revenue Next Year6.05%
Revenue Next 2Y5.95%
Revenue Next 3Y6.06%
Revenue Next 5Y6.81%
EBIT growth 1Y-1.75%
EBIT growth 3Y-1.17%
EBIT growth 5Y-0.13%
EBIT Next Year5.99%
EBIT Next 3Y6.51%
EBIT Next 5Y6.73%
FCF growth 1Y-5.14%
FCF growth 3Y-4.7%
FCF growth 5Y-0.95%
OCF growth 1Y-4.75%
OCF growth 3Y-4.38%
OCF growth 5Y-0.96%