CHECK POINT SOFTWARE TECH (CHKP) Stock Fundamental Analysis
NASDAQ:CHKP - Nasdaq - IL0010824113 - Common Stock - Currency: USD
Taking everything into account, CHKP scores 7 out of 10 in our fundamental rating. CHKP was compared to 284 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 decent growth rate and is not valued too expensively. These ratings could make CHKP a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
CHKP had positive earnings in the past year.
In the past year CHKP had a positive cash flow from operations.
In the past 5 years CHKP has always been profitable.
In the past 5 years CHKP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CHKP (15.34%) is better than 91.17% of its industry peers.
With an excellent Return On Equity value of 31.02%, CHKP belongs to the best of the industry, outperforming 90.46% of the companies in the same industry.
The Return On Invested Capital of CHKP (20.13%) is better than 94.35% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CHKP is significantly above the industry average of 12.01%.
The last Return On Invested Capital (20.13%) for CHKP is above the 3 year average (20.07%), which is a sign of increasing profitability.
| 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 94.35% of its industry peers.
In the last couple of years the Profit Margin of CHKP has declined.
With an excellent Operating Margin value of 33.70%, CHKP belongs to the best of the industry, outperforming 96.47% of the companies in the same industry.
CHKP's Operating Margin has declined in the last couple of years.
CHKP has a Gross Margin of 87.23%. This is amongst the best in the industry. CHKP outperforms 95.05% of its industry peers.
CHKP's Gross Margin has been stable in the last couple of years.
| 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.
The number of shares outstanding for CHKP has been reduced compared to 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
CHKP has an Altman-Z score of 9.71. This indicates that CHKP is financially healthy and has little risk of bankruptcy at the moment.
CHKP has a better Altman-Z score (9.71) than 87.63% of its industry peers.
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.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 9.71 |
ROIC/WACC2.16
WACC9.3%
2.3 Liquidity
A Current Ratio of 1.10 indicates that CHKP should not have too much problems paying its short term obligations.
CHKP has a Current ratio of 1.10. This is in the lower half of the industry: CHKP underperforms 71.02% of its industry peers.
A Quick Ratio of 1.10 indicates that CHKP should not have too much problems paying its short term obligations.
CHKP has a Quick ratio of 1.10. This is in the lower half of the industry: CHKP underperforms 69.96% 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
CHKP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.49%.
CHKP shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.26% yearly.
Looking at the last year, CHKP shows a small growth in Revenue. The Revenue has grown by 6.40% in the last year.
CHKP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.16% yearly.
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 11.65% on average per year.
Based on estimates for the next years, CHKP will show a small growth in Revenue. The Revenue will grow by 5.59% on average per year.
EPS Next Y10.39%
EPS Next 2Y9.8%
EPS Next 3Y10%
EPS Next 5Y11.65%
Revenue Next Year6.24%
Revenue Next 2Y5.91%
Revenue Next 3Y5.75%
Revenue Next 5Y5.59%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.40, the valuation of CHKP can be described as rather expensive.
Based on the Price/Earnings ratio, CHKP is valued a bit cheaper than the industry average as 73.14% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CHKP to the average of the S&P500 Index (24.21), we can say CHKP is valued inline with the index average.
CHKP is valuated rather expensively with a Price/Forward Earnings ratio of 19.77.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CHKP indicates a somewhat cheap valuation: CHKP is cheaper than 76.68% of the companies listed in the same industry.
CHKP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.4 | ||
| Fwd PE | 19.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CHKP is valued a bit cheaper than 79.15% of the companies in the same industry.
79.51% of the companies in the same industry are more expensive than CHKP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.49 | ||
| EV/EBITDA | 22.22 |
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.
The excellent profitability rating of CHKP may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)2.83
EPS Next 2Y9.8%
EPS Next 3Y10%
5. Dividend
5.1 Amount
CHKP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
218.33
-2.34 (-1.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.55%
Inst Owner Change0.15%
Ins Owners22.62%
Ins Owner ChangeN/A
Market Cap23.66B
Analysts72.61
Price Target242.64 (11.13%)
Short Float %3.37%
Short Ratio2.58
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)1.81%
PT rev (3m)20.25%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)-0.11%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-0.16%
Revenue NQ rev (1m)-0.47%
Revenue NQ rev (3m)-0.05%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.4 | ||
| Fwd PE | 19.77 | ||
| P/S | 9.09 | ||
| P/FCF | 21.49 | ||
| P/OCF | 21.01 | ||
| P/B | 8.61 | ||
| P/tB | 27.18 | ||
| EV/EBITDA | 22.22 |
EPS(TTM)9.33
EY4.27%
EPS(NY)11.04
Fwd EY5.06%
FCF(TTM)10.16
FCFY4.65%
OCF(TTM)10.39
OCFY4.76%
SpS24.03
BVpS25.36
TBVpS8.03
PEG (NY)2.25
PEG (5Y)2.83
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
WACC9.3%
ROIC/WACC2.16
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 Y10.39%
EPS Next 2Y9.8%
EPS Next 3Y10%
EPS Next 5Y11.65%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.51%
Revenue Next Year6.24%
Revenue Next 2Y5.91%
Revenue Next 3Y5.75%
Revenue Next 5Y5.59%
EBIT growth 1Y-1.75%
EBIT growth 3Y-1.17%
EBIT growth 5Y-0.13%
EBIT Next Year7.07%
EBIT Next 3Y6.41%
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%