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Check Point (CHKP) Up 3.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Check Point Software (CHKP - Free Report) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Check Point due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Check Point Q2 Earnings & Revenues Top Estimates, Up Y/Y
Check Point Software Technologies reported strong second-quarter 2022 results, wherein both the top and bottom lines surpassed the respective Zacks Consensus Estimate and improved year over year.
The IT security solutions provider reported non-GAAP earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.62. The bottom line increased 2% from the year-ago quarter’s earnings of $1.61 per share.
Check Point’s quarterly revenues climbed 9% year over year to $571 million, outpacing the Zacks Consensus Estimate of $560.1 million. This upside was driven by double-digit growth in product and subscription revenues.
Quarterly Details
Subscription revenues were $209.9 million, advancing 14% year over year on double-digit revenues in Quantum and CloudGuard solutions and a 50% growth in Harmony, the cybersecurity firm’s cloud email security platform.
Products and licenses revenues increased 12% year over year to $133.2 million. Products, which are currently in the process of transitioning to cloud solutions, have been included in the subscription line.
Total revenues from product and security subscriptions were $343.1 million, up 13.3% year over year.
Software updates and maintenance revenues increased to $228 million from $223.3 million reported in the year-ago quarter.
As of Jun 30, 2022, deferred revenues were $1.67 billion, up 13% year over year.
Non-GAAP operating income for the second quarter of 2022 totaled $249 million, down from $257 million in the year-ago quarter. Non-GAAP operating margin contracted 500 basis points to 44%.
Balance Sheet & Other Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.68 billion compared with the previous quarter’s $3.80 billion.
The company generated cash worth $212 million from operational activities during the second quarter.
It repurchased 2.6 million shares for about $325 million during the reported quarter.
Outlook
For third-quarter 2022, CHKP expects revenues between $555 million and $585 million. It projects non-GAAP earnings to be in the $1.60-$1.72 per share band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Check Point has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Check Point has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Check Point (CHKP) Up 3.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Check Point Software (CHKP - Free Report) . Shares have added about 3.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Check Point due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Check Point Q2 Earnings & Revenues Top Estimates, Up Y/Y
Check Point Software Technologies reported strong second-quarter 2022 results, wherein both the top and bottom lines surpassed the respective Zacks Consensus Estimate and improved year over year.
The IT security solutions provider reported non-GAAP earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.62. The bottom line increased 2% from the year-ago quarter’s earnings of $1.61 per share.
Check Point’s quarterly revenues climbed 9% year over year to $571 million, outpacing the Zacks Consensus Estimate of $560.1 million. This upside was driven by double-digit growth in product and subscription revenues.
Quarterly Details
Subscription revenues were $209.9 million, advancing 14% year over year on double-digit revenues in Quantum and CloudGuard solutions and a 50% growth in Harmony, the cybersecurity firm’s cloud email security platform.
Products and licenses revenues increased 12% year over year to $133.2 million. Products, which are currently in the process of transitioning to cloud solutions, have been included in the subscription line.
Total revenues from product and security subscriptions were $343.1 million, up 13.3% year over year.
Software updates and maintenance revenues increased to $228 million from $223.3 million reported in the year-ago quarter.
As of Jun 30, 2022, deferred revenues were $1.67 billion, up 13% year over year.
Non-GAAP operating income for the second quarter of 2022 totaled $249 million, down from $257 million in the year-ago quarter. Non-GAAP operating margin contracted 500 basis points to 44%.
Balance Sheet & Other Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.68 billion compared with the previous quarter’s $3.80 billion.
The company generated cash worth $212 million from operational activities during the second quarter.
It repurchased 2.6 million shares for about $325 million during the reported quarter.
Outlook
For third-quarter 2022, CHKP expects revenues between $555 million and $585 million. It projects non-GAAP earnings to be in the $1.60-$1.72 per share band.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Check Point has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Check Point has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.