We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Check Point (CHKP) Up 0.1% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Check Point Software (CHKP - Free Report) . Shares have added about 0.1% 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 its most recent earnings report in order to get a better handle on the important drivers.
Check Point Software Technologies reported better-than-anticipated second-quarter 2023 results, wherein both the bottom line and top line surpassed the Zacks Consensus Estimates and improved year over year.
The IT security solutions provider reported non-GAAP earnings of $2.00 per share, beating the Zacks Consensus Estimate of $1.89. The bottom line increased 22% from the year-ago quarter’s earnings of $1.64 per share.
Check Point’s quarterly revenues climbed 3% year over year to $589 million, which surpassed the Zacks Consensus Estimate of $588 million. The upside was driven by double-digit growth in Security subscription revenues.
Quarterly Details
Security subscription revenues were $239 million, increasing 14% year over year on double-digit revenue growth in Quantum, CloudGuard and Harmony solutions. According to our model estimates, Security subscription revenues were likely to grow 7.3% to $225.1 million.
Products and licenses revenues decreased 12% year over year to $117 million. Our estimates for Products and licenses revenues were pegged at $127.7 million, suggesting a 4.1% year-over-year decline. 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 $355.8 million, up 3.7% year over year.
Software updates and maintenance revenues increased to $232.9 million from $228 million reported in the year-ago quarter. The estimates from our model were pegged at $233.1 million for Software updates and maintenance revenues.
As of Jun 30, 2023, deferred revenues were $1.77 billion, up 7% year over year.
Non-GAAP operating income for the second quarter of 2023 totaled $263 million, up from $249 million in the year-ago quarter. Non-GAAP operating margin expanded 150 basis points from 43.5% to 45%.
Balance Sheet & Other Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.52 billion compared with the previous quarter’s $3.62 billion.
The company generated cash worth $191 million from operational activities during the second quarter of 2023.
It repurchased 2.6 million shares for about $325 million during the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Check Point has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Check Point has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Check Point (CHKP) Up 0.1% 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 0.1% 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 its most recent earnings report in order to get a better handle on the important drivers.
Check Point’s Q2 Earnings & Sales Beat Expectations
Check Point Software Technologies reported better-than-anticipated second-quarter 2023 results, wherein both the bottom line and top line surpassed the Zacks Consensus Estimates and improved year over year.
The IT security solutions provider reported non-GAAP earnings of $2.00 per share, beating the Zacks Consensus Estimate of $1.89. The bottom line increased 22% from the year-ago quarter’s earnings of $1.64 per share.
Check Point’s quarterly revenues climbed 3% year over year to $589 million, which surpassed the Zacks Consensus Estimate of $588 million. The upside was driven by double-digit growth in Security subscription revenues.
Quarterly Details
Security subscription revenues were $239 million, increasing 14% year over year on double-digit revenue growth in Quantum, CloudGuard and Harmony solutions. According to our model estimates, Security subscription revenues were likely to grow 7.3% to $225.1 million.
Products and licenses revenues decreased 12% year over year to $117 million. Our estimates for Products and licenses revenues were pegged at $127.7 million, suggesting a 4.1% year-over-year decline. 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 $355.8 million, up 3.7% year over year.
Software updates and maintenance revenues increased to $232.9 million from $228 million reported in the year-ago quarter. The estimates from our model were pegged at $233.1 million for Software updates and maintenance revenues.
As of Jun 30, 2023, deferred revenues were $1.77 billion, up 7% year over year.
Non-GAAP operating income for the second quarter of 2023 totaled $263 million, up from $249 million in the year-ago quarter. Non-GAAP operating margin expanded 150 basis points from 43.5% to 45%.
Balance Sheet & Other Details
Check Point exited the second quarter with cash and cash equivalents, marketable securities and short-term deposits of $3.52 billion compared with the previous quarter’s $3.62 billion.
The company generated cash worth $191 million from operational activities during the second quarter of 2023.
It repurchased 2.6 million shares for about $325 million during the reported quarter.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Check Point has a subpar Growth Score of D, a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Check Point has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.