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 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 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
CHKP had positive earnings in the past year.
CHKP had a positive operating cash flow in the past year.
In the past 5 years CHKP has always been profitable.
CHKP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CHKP has a Return On Assets of 15.34%. This is amongst the best in the industry. CHKP outperforms 91.49% of its industry peers.
Looking at the Return On Equity, with a value of 31.02%, CHKP belongs to the top of the industry, outperforming 91.13% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 20.13%, CHKP belongs to the top of the industry, outperforming 93.97% of the companies in the same industry.
CHKP had an Average Return On Invested Capital over the past 3 years of 20.07%. This is significantly above the industry average of 12.26%.
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
CHKP has a Profit Margin of 32.75%. This is amongst the best in the industry. CHKP outperforms 95.39% of its industry peers.
In the last couple of years the Profit Margin of CHKP has declined.
CHKP's Operating Margin of 33.70% is amongst the best of the industry. CHKP outperforms 96.10% of its industry peers.
In the last couple of years the Operating Margin of CHKP has declined.
CHKP has a better Gross Margin (87.23%) than 95.04% 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 | 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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
CHKP has an Altman-Z score of 9.73. This indicates that CHKP is financially healthy and has little risk of bankruptcy at the moment.
CHKP has a Altman-Z score of 9.73. This is amongst the best in the industry. CHKP outperforms 82.27% 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 | 9.73 |
ROIC/WACC2.11
WACC9.52%
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 worse Current ratio (1.10) than 70.21% 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 worse Quick ratio (1.10) than 69.15% of its industry peers.
The current and quick ratio evaluation for CHKP is rather negative, while it does have 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.
Looking at the last year, CHKP shows a small growth in Revenue. The Revenue has grown by 6.40% in the last year.
The Revenue has been growing slightly by 5.16% on average over the past years.
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
CHKP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.82% yearly.
CHKP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.81% yearly.
EPS Next Y10.29%
EPS Next 2Y9.84%
EPS Next 3Y10.61%
EPS Next 5Y11.82%
Revenue Next Year6.13%
Revenue Next 2Y6.01%
Revenue Next 3Y6.12%
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
A Price/Earnings ratio of 23.70 indicates a rather expensive valuation of CHKP.
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 27.21, CHKP is valued at the same level.
Based on the Price/Forward Earnings ratio of 20.00, the valuation of CHKP can be described as rather expensive.
Based on the Price/Forward Earnings ratio, CHKP is valued a bit cheaper than the industry average as 75.89% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of CHKP to the average of the S&P500 Index (21.70), we can say CHKP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.7 | ||
| Fwd PE | 20 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CHKP is valued a bit cheaper than 79.43% of the companies in the same industry.
80.14% 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 | 21.76 | ||
| EV/EBITDA | 22.29 |
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)2.3
PEG (5Y)2.87
EPS Next 2Y9.84%
EPS Next 3Y10.61%
5. Dividend
5.1 Amount
CHKP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
221.08
-0.17 (-0.08%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners69.63%
Inst Owner Change-2.84%
Ins Owners22.96%
Ins Owner ChangeN/A
Market Cap23.96B
Analysts72.61
Price Target241.1 (9.06%)
Short Float %4.45%
Short Ratio4.69
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)0.29%
PT rev (3m)2.91%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)0.19%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.19%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-0.37%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.7 | ||
| Fwd PE | 20 | ||
| P/S | 9.2 | ||
| P/FCF | 21.76 | ||
| P/OCF | 21.28 | ||
| P/B | 8.72 | ||
| P/tB | 27.52 | ||
| EV/EBITDA | 22.29 |
EPS(TTM)9.33
EY4.22%
EPS(NY)11.05
Fwd EY5%
FCF(TTM)10.16
FCFY4.59%
OCF(TTM)10.39
OCFY4.7%
SpS24.03
BVpS25.36
TBVpS8.03
PEG (NY)2.3
PEG (5Y)2.87
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 | 9.73 |
F-Score7
WACC9.52%
ROIC/WACC2.11
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 Y10.29%
EPS Next 2Y9.84%
EPS Next 3Y10.61%
EPS Next 5Y11.82%
Revenue 1Y (TTM)6.4%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.51%
Revenue Next Year6.13%
Revenue Next 2Y6.01%
Revenue Next 3Y6.12%
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%