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 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 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
CHKP had positive earnings in the past year.
CHKP had a positive operating cash flow in the past year.
Each year in the past 5 years CHKP has been profitable.
CHKP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CHKP's Return On Assets of 15.09% is amongst the best of the industry. CHKP outperforms 91.13% of its industry peers.
CHKP's Return On Equity of 30.27% is amongst the best of the industry. CHKP outperforms 91.49% of its industry peers.
Looking at the Return On Invested Capital, with a value of 19.22%, CHKP belongs to the top of the industry, outperforming 93.26% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CHKP is significantly above the industry average of 12.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.09% | ||
| ROE | 30.27% | ||
| ROIC | 19.22% |
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 (32.48%) is better than 94.68% of its industry peers.
In the last couple of years the Profit Margin of CHKP has declined.
CHKP has a Operating Margin of 33.00%. This is amongst the best in the industry. CHKP outperforms 96.10% of its industry peers.
CHKP's Operating Margin has declined in the last couple of years.
CHKP has a Gross Margin of 86.92%. This is amongst the best in the industry. CHKP outperforms 95.39% 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 | 33% | ||
| PM (TTM) | 32.48% | ||
| GM | 86.92% |
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.
CHKP has less shares outstanding than it did 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 8.81. This indicates that CHKP is financially healthy and has little risk of bankruptcy at the moment.
CHKP's Altman-Z score of 8.81 is amongst the best of the industry. CHKP outperforms 83.69% 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 | 8.81 |
ROIC/WACC2.02
WACC9.5%
2.3 Liquidity
CHKP has a Current Ratio of 1.19. This is a normal value and indicates that CHKP is financially healthy and should not expect problems in meeting its short term obligations.
CHKP's Current ratio of 1.19 is on the low side compared to the rest of the industry. CHKP is outperformed by 64.18% of its industry peers.
A Quick Ratio of 1.19 indicates that CHKP should not have too much problems paying its short term obligations.
CHKP has a Quick ratio of 1.19. This is in the lower half of the industry: CHKP underperforms 64.18% 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 | 1.19 | ||
| Quick Ratio | 1.19 |
3. Growth
3.1 Past
CHKP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.68%.
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 6.27% in the last year.
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)7.68%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%9.22%
Revenue 1Y (TTM)6.27%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.02%
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 2Y5.93%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.24, 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 78.01% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. CHKP is valued slightly cheaper when compared to this.
CHKP is valuated correctly with a Price/Forward Earnings ratio of 16.61.
Based on the Price/Forward Earnings ratio, CHKP is valued cheaply inside the industry as 81.91% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 34.04. CHKP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 16.61 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CHKP is valued cheaper than 83.69% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CHKP indicates a rather cheap valuation: CHKP is cheaper than 84.40% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.07 | ||
| EV/EBITDA | 18.24 |
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)1.89
PEG (5Y)2.33
EPS Next 2Y9.78%
EPS Next 3Y10.56%
5. Dividend
5.1 Amount
No dividends for CHKP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
183.32
-1.71 (-0.92%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners69.63%
Inst Owner Change-0.91%
Ins Owners22.96%
Ins Owner ChangeN/A
Market Cap19.87B
Analysts72.61
Price Target230.47 (25.72%)
Short Float %4.18%
Short Ratio4.99
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)-1.29%
Min EPS beat(2)-1.7%
Max EPS beat(2)-0.88%
EPS beat(4)0
Avg EPS beat(4)-1.21%
Min EPS beat(4)-1.99%
Max EPS beat(4)-0.28%
EPS beat(8)2
Avg EPS beat(8)-0.53%
EPS beat(12)6
Avg EPS beat(12)0.55%
EPS beat(16)9
Avg EPS beat(16)0.73%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-1.71%
Max Revenue beat(2)-1.44%
Revenue beat(4)0
Avg Revenue beat(4)-1.58%
Min Revenue beat(4)-1.92%
Max Revenue beat(4)-1.24%
Revenue beat(8)0
Avg Revenue beat(8)-1.47%
Revenue beat(12)0
Avg Revenue beat(12)-1.56%
Revenue beat(16)1
Avg Revenue beat(16)-1.23%
PT rev (1m)0.34%
PT rev (3m)-0.3%
EPS NQ rev (1m)-0.03%
EPS NQ rev (3m)-0.74%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)-0.21%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.24 | ||
| Fwd PE | 16.61 | ||
| P/S | 7.52 | ||
| P/FCF | 17.07 | ||
| P/OCF | 16.71 | ||
| P/B | 7.01 | ||
| P/tB | 22.43 | ||
| EV/EBITDA | 18.24 |
EPS(TTM)9.53
EY5.2%
EPS(NY)11.04
Fwd EY6.02%
FCF(TTM)10.74
FCFY5.86%
OCF(TTM)10.97
OCFY5.98%
SpS24.38
BVpS26.16
TBVpS8.17
PEG (NY)1.89
PEG (5Y)2.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.09% | ||
| ROE | 30.27% | ||
| ROCE | 22.21% | ||
| ROIC | 19.22% | ||
| ROICexc | 31.42% | ||
| ROICexgc | 166.54% | ||
| OM | 33% | ||
| PM (TTM) | 32.48% | ||
| GM | 86.92% | ||
| FCFM | 44.06% |
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 Turnover0.46
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 26.44% | ||
| Cap/Sales | 0.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 123.09% | ||
| Profit Quality | 135.64% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.19 | ||
| Altman-Z | 8.81 |
F-Score7
WACC9.5%
ROIC/WACC2.02
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)7.68%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%9.22%
EPS Next Y10.16%
EPS Next 2Y9.78%
EPS Next 3Y10.56%
EPS Next 5Y11.82%
Revenue 1Y (TTM)6.27%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.02%
Revenue Next Year6.05%
Revenue Next 2Y5.93%
Revenue Next 3Y6.06%
Revenue Next 5Y6.81%
EBIT growth 1Y-1.04%
EBIT growth 3Y-1.17%
EBIT growth 5Y-0.13%
EBIT Next Year5.55%
EBIT Next 3Y5.02%
EBIT Next 5Y6.73%
FCF growth 1Y0.42%
FCF growth 3Y-4.7%
FCF growth 5Y-0.95%
OCF growth 1Y0.95%
OCF growth 3Y-4.38%
OCF growth 5Y-0.96%