Check Point Software Technologies Ltd.
Check Point Software Technologies Ltd. Fundamental Analysis
Check Point Software Technologies Ltd. (CHKP) shows strong financial fundamentals with a PE ratio of 12.23, profit margin of 38.37%, and ROE of 36.43%. The company generates $2.7B in annual revenue with moderate year-over-year growth of 6.25%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 78.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze CHKP's fundamental strength across five key dimensions:
Efficiency Score
ExcellentCHKP demonstrates superior asset utilization.
Valuation Score
ExcellentCHKP trades at attractive valuation levels.
Growth Score
ExcellentCHKP delivers strong and consistent growth momentum.
Financial Health Score
ExcellentCHKP maintains a strong and stable balance sheet.
Profitability Score
ExcellentCHKP achieves industry-leading margins.
Key Financial Metrics
Is CHKP Expensive or Cheap?
P/E Ratio
CHKP trades at 12.23 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, CHKP's PEG of 0.45 indicates potential undervaluation.
Price to Book
The market values Check Point Software Technologies Ltd. at 4.60 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 12.40 times EBITDA. This signals the market has high growth expectations.
How Well Does CHKP Make Money?
Net Profit Margin
For every $100 in sales, Check Point Software Technologies Ltd. keeps $38.37 as profit after all expenses.
Operating Margin
Core operations generate 29.78 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $36.43 in profit for every $100 of shareholder equity.
ROA
Check Point Software Technologies Ltd. generates $13.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Check Point Software Technologies Ltd. generates strong operating cash flow of $1.33B, reflecting robust business health.
Free Cash Flow
Check Point Software Technologies Ltd. generates strong free cash flow of $1.30B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.50 in free cash annually.
FCF Yield
CHKP converts 10.14% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.45
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.60
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.67
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.70
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.85
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.36
vs 25 benchmark
ROA
Return on assets percentage
0.14
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How CHKP Stacks Against Its Sector Peers
| Metric | CHKP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.23 | 36.81 | Better (Cheaper) |
| ROE | 36.43% | 974.00% | Weak |
| Net Margin | 38.37% | 5914823191.00% | Weak |
| Debt/Equity | 0.70 | 0.34 | Weak (High Leverage) |
| Current Ratio | 1.85 | 4.93 | Neutral |
| ROA | 13.89% | -294975.00% (disorted) | Strong |
CHKP outperforms its industry in 2 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Check Point Software Technologies Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
72.83%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
63.47%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
39.20%
Industry Style: Growth, Innovation, High Beta
High Growth