CHECK POINT SOFTWARE TECH (CHKP) Stock Fundamental Analysis
NASDAQ:CHKP - Nasdaq - IL0010824113 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to CHKP. CHKP was compared to 285 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 has a decent growth rate and is not valued too expensively. With these ratings, CHKP could be worth investigating further 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.
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 14.72% is amongst the best of the industry. CHKP outperforms 90.88% of its industry peers.
The Return On Equity of CHKP (30.32%) is better than 90.88% of its industry peers.
With an excellent Return On Invested Capital value of 19.96%, CHKP belongs to the best of the industry, outperforming 95.44% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CHKP is significantly above the industry average of 11.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.72% | ||
| ROE | 30.32% | ||
| ROIC | 19.96% |
ROA(3y)14.47%
ROA(5y)14.34%
ROE(3y)29.1%
ROE(5y)27.36%
ROIC(3y)20.08%
ROIC(5y)19.45%
1.3 Margins
CHKP's Profit Margin of 32.97% is amongst the best of the industry. CHKP outperforms 93.68% of its industry peers.
CHKP's Profit Margin has declined in the last couple of years.
The Operating Margin of CHKP (34.15%) is better than 96.14% of its industry peers.
In the last couple of years the Operating Margin of CHKP has declined.
CHKP's Gross Margin of 87.55% is amongst the best of the industry. CHKP outperforms 94.04% 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 | 34.15% | ||
| PM (TTM) | 32.97% | ||
| GM | 87.55% |
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.
Compared to 5 years ago, CHKP has less shares outstanding
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 8.98 indicates that CHKP is not in any danger for bankruptcy at the moment.
CHKP's Altman-Z score of 8.98 is amongst the best of the industry. CHKP outperforms 85.96% 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 | 8.98 |
ROIC/WACC2.15
WACC9.28%
2.3 Liquidity
A Current Ratio of 1.13 indicates that CHKP should not have too much problems paying its short term obligations.
With a Current ratio value of 1.13, CHKP is not doing good in the industry: 69.12% of the companies in the same industry are doing better.
CHKP has a Quick Ratio of 1.13. This is a normal value and indicates that CHKP is financially healthy and should not expect problems in meeting its short term obligations.
CHKP has a worse Quick ratio (1.13) than 68.42% 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 | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.53% over the past year.
Measured over the past years, CHKP shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.26% on average per year.
The Revenue has been growing slightly by 6.22% in the past year.
The Revenue has been growing slightly by 5.16% on average over the past years.
EPS 1Y (TTM)8.53%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%5.06%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.06%
3.2 Future
The Earnings Per Share is expected to grow by 11.65% on average over the next years. This is quite good.
The Revenue is expected to grow by 5.59% on average over the next years.
EPS Next Y10.39%
EPS Next 2Y9.8%
EPS Next 3Y10%
EPS Next 5Y11.65%
Revenue Next Year6.36%
Revenue Next 2Y5.99%
Revenue Next 3Y5.91%
Revenue Next 5Y5.59%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 22.64, the valuation of CHKP can be described as rather expensive.
70.53% of the companies in the same industry are more expensive than CHKP, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.63, CHKP is valued at the same level.
Based on the Price/Forward Earnings ratio of 20.51, the valuation of CHKP can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CHKP is valued a bit cheaper than 74.74% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.85, CHKP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.64 | ||
| Fwd PE | 20.51 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CHKP indicates a somewhat cheap valuation: CHKP is cheaper than 77.89% of the companies listed in the same industry.
77.19% 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 | 21.01 | ||
| EV/EBITDA | 21.09 |
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)2.18
PEG (5Y)2.74
EPS Next 2Y9.8%
EPS Next 3Y10%
5. Dividend
5.1 Amount
No dividends for CHKP!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
207.36
-7.6 (-3.54%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.55%
Inst Owner Change0.01%
Ins Owners22.62%
Ins Owner ChangeN/A
Market Cap22.47B
Analysts73.18
Price Target241.12 (16.28%)
Short Float %3.57%
Short Ratio3.06
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)-1.13%
Min EPS beat(2)-1.99%
Max EPS beat(2)-0.28%
EPS beat(4)0
Avg EPS beat(4)-0.98%
Min EPS beat(4)-1.99%
Max EPS beat(4)-0.23%
EPS beat(8)4
Avg EPS beat(8)0.43%
EPS beat(12)7
Avg EPS beat(12)0.75%
EPS beat(16)11
Avg EPS beat(16)1.03%
Revenue beat(2)0
Avg Revenue beat(2)-1.58%
Min Revenue beat(2)-1.92%
Max Revenue beat(2)-1.24%
Revenue beat(4)0
Avg Revenue beat(4)-1.44%
Min Revenue beat(4)-1.92%
Max Revenue beat(4)-1.24%
Revenue beat(8)0
Avg Revenue beat(8)-1.63%
Revenue beat(12)0
Avg Revenue beat(12)-1.34%
Revenue beat(16)1
Avg Revenue beat(16)-1.19%
PT rev (1m)2.92%
PT rev (3m)20.76%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-1.73%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)-0.33%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)0.53%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.64 | ||
| Fwd PE | 20.51 | ||
| P/S | 8.76 | ||
| P/FCF | 21.01 | ||
| P/OCF | 20.54 | ||
| P/B | 8.06 | ||
| P/tB | 25.18 | ||
| EV/EBITDA | 21.09 |
EPS(TTM)9.16
EY4.42%
EPS(NY)10.11
Fwd EY4.88%
FCF(TTM)9.87
FCFY4.76%
OCF(TTM)10.1
OCFY4.87%
SpS23.67
BVpS25.74
TBVpS8.23
PEG (NY)2.18
PEG (5Y)2.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.72% | ||
| ROE | 30.32% | ||
| ROCE | 23.06% | ||
| ROIC | 19.96% | ||
| ROICexc | 31.24% | ||
| ROICexgc | 143.02% | ||
| OM | 34.15% | ||
| PM (TTM) | 32.97% | ||
| GM | 87.55% | ||
| FCFM | 41.71% |
ROA(3y)14.47%
ROA(5y)14.34%
ROE(3y)29.1%
ROE(5y)27.36%
ROIC(3y)20.08%
ROIC(5y)19.45%
ROICexc(3y)33.3%
ROICexc(5y)32.28%
ROICexgc(3y)126.26%
ROICexgc(5y)98.44%
ROCE(3y)23.2%
ROCE(5y)22.46%
ROICexcg growth 3Y31.08%
ROICexcg growth 5Y27.01%
ROICexc growth 3Y-0.27%
ROICexc growth 5Y2.68%
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-Score6
Asset Turnover0.45
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 28.95% | ||
| Cap/Sales | 0.94% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 114.01% | ||
| Profit Quality | 126.5% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 8.98 |
F-Score6
WACC9.28%
ROIC/WACC2.15
Cap/Depr(3y)43.08%
Cap/Depr(5y)50.45%
Cap/Sales(3y)0.89%
Cap/Sales(5y)0.87%
Profit Quality(3y)127.63%
Profit Quality(5y)132.68%
High Growth Momentum
Growth
EPS 1Y (TTM)8.53%
EPS 3Y9.12%
EPS 5Y8.26%
EPS Q2Q%5.06%
EPS Next Y10.39%
EPS Next 2Y9.8%
EPS Next 3Y10%
EPS Next 5Y11.65%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.06%
Revenue Next Year6.36%
Revenue Next 2Y5.99%
Revenue Next 3Y5.91%
Revenue Next 5Y5.59%
EBIT growth 1Y-2.57%
EBIT growth 3Y-1.17%
EBIT growth 5Y-0.13%
EBIT Next Year7.07%
EBIT Next 3Y6.41%
EBIT Next 5Y6.73%
FCF growth 1Y4.95%
FCF growth 3Y-3.43%
FCF growth 5Y-0.16%
OCF growth 1Y5.41%
OCF growth 3Y-3.14%
OCF growth 5Y-0.19%