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 283 industry peers in the Software industry. CHKP has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. 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.
In the past year CHKP had a positive cash flow from operations.
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 has a Return On Assets of 14.72%. This is amongst the best in the industry. CHKP outperforms 90.46% of its industry peers.
CHKP has a Return On Equity of 30.32%. This is amongst the best in the industry. CHKP outperforms 91.52% of its industry peers.
CHKP has a better Return On Invested Capital (19.96%) than 95.41% of its industry peers.
CHKP had an Average Return On Invested Capital over the past 3 years of 20.08%. This is significantly above the industry average of 10.81%.
| 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
The Profit Margin of CHKP (32.97%) is better than 94.35% of its industry peers.
In the last couple of years the Profit Margin of CHKP has declined.
CHKP has a Operating Margin of 34.15%. This is amongst the best in the industry. CHKP outperforms 96.11% of its industry peers.
In the last couple of years the Operating Margin of CHKP has declined.
Looking at the Gross Margin, with a value of 87.55%, CHKP belongs to the top of the industry, outperforming 93.64% 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 | 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
CHKP has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it 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 9.56 indicates that CHKP is not in any danger for bankruptcy at the moment.
CHKP's Altman-Z score of 9.56 is amongst the best of the industry. CHKP outperforms 84.45% 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 | 9.56 |
ROIC/WACC2.19
WACC9.11%
2.3 Liquidity
CHKP has a Current 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 Current ratio of 1.13. This is in the lower half of the industry: CHKP underperforms 69.61% of its industry peers.
A Quick Ratio of 1.13 indicates that CHKP should not have too much problems paying its short term obligations.
CHKP has a Quick ratio of 1.13. This is in the lower half of the industry: CHKP underperforms 68.90% 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
CHKP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.53%, which is quite good.
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.
CHKP shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.16% yearly.
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 Y10.5%
EPS Next 2Y9.86%
EPS Next 3Y10.56%
EPS Next 5Y11.65%
Revenue Next Year6.24%
Revenue Next 2Y5.88%
Revenue Next 3Y5.9%
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
With a Price/Earnings ratio of 25.13, CHKP can be considered very expensive at the moment.
Based on the Price/Earnings ratio, CHKP is valued a bit cheaper than 74.91% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.35, CHKP is valued at the same level.
With a Price/Forward Earnings ratio of 22.74, CHKP is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CHKP indicates a somewhat cheap valuation: CHKP is cheaper than 75.62% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.10. CHKP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.13 | ||
| Fwd PE | 22.74 |
4.2 Price Multiples
79.15% of the companies in the same industry are more expensive than CHKP, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, CHKP is valued a bit cheaper than the industry average as 77.74% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.67 | ||
| EV/EBITDA | 24.05 |
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)2.39
PEG (5Y)3.04
EPS Next 2Y9.86%
EPS Next 3Y10.56%
5. Dividend
5.1 Amount
CHKP does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
230.2
+6.72 (+3.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners72.55%
Inst Owner Change1.81%
Ins Owners22.62%
Ins Owner ChangeN/A
Market Cap25.32B
Analysts71.36
Price Target234.28 (1.77%)
Short Float %3.66%
Short Ratio3.66
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)16.1%
PT rev (3m)17.71%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.81%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)-0.22%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.13 | ||
| Fwd PE | 22.74 | ||
| P/S | 9.87 | ||
| P/FCF | 23.67 | ||
| P/OCF | 23.14 | ||
| P/B | 9.08 | ||
| P/tB | 28.37 | ||
| EV/EBITDA | 24.05 |
EPS(TTM)9.16
EY3.98%
EPS(NY)10.12
Fwd EY4.4%
FCF(TTM)9.73
FCFY4.23%
OCF(TTM)9.95
OCFY4.32%
SpS23.32
BVpS25.36
TBVpS8.11
PEG (NY)2.39
PEG (5Y)3.04
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 | 9.56 |
F-Score6
WACC9.11%
ROIC/WACC2.19
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 Y10.5%
EPS Next 2Y9.86%
EPS Next 3Y10.56%
EPS Next 5Y11.65%
Revenue 1Y (TTM)6.22%
Revenue growth 3Y5.78%
Revenue growth 5Y5.16%
Sales Q2Q%6.06%
Revenue Next Year6.24%
Revenue Next 2Y5.88%
Revenue Next 3Y5.9%
Revenue Next 5Y5.59%
EBIT growth 1Y-2.57%
EBIT growth 3Y-1.17%
EBIT growth 5Y-0.13%
EBIT Next Year7.42%
EBIT Next 3Y6.88%
EBIT Next 5YN/A
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%