November 23, 2023
Top 10 Stock Check Point Software Hold Recommendation

Latest Research

For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Check Point Software Hold

360 METRICS	November 23, 2023
VALUE
VALUE	40
GROWTH
GROWTH	27
SAFETY
SAFETY	96
SENTIMENT
SENTIMENT	66
360° VIEW
360° VIEW	31

ANALYSIS: With an Obermatt 360° View of 31 (better than 31% compared with alternatives), overall professional sentiment and financial characteristics for the stock Check Point Software are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Check Point Software. The consolidated Sentiment Rank has a good rank of 66, which means that professional investors are more optimistic about the stock than for 66% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 96 or better than 96% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 40, meaning that the share price of Check Point Software is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 27. ...read more

RECOMMENDATION: With a consolidated 360° View of 31, Check Point Software is worse than 69% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 66) and safe financing practices (Safety Rank of 96), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Check Point Softwarẹ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

---

Sentiment Strategy: Professional Market Sentiment for Check Point Software positive

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	18
OPINIONS CHANGE
OPINIONS CHANGE	91
PRO HOLDINGS
PRO HOLDINGS	98
MARKET PULSE
MARKET PULSE	44
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	66

ANALYSIS: With an Obermatt Sentiment Rank of 66 (better than 66% compared with alternatives), overall professional sentiment and engagement for the stock Check Point Software is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Check Point Software. Analyst Opinions are at a rank of 18 (worse than 82% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 91, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Check Point Software. More encouragingly, the Professional Investors rank is 98, which means that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 44, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 56% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 66 (more positive than 66% compared with investment alternatives), Check Point Software has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Check Point Software. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more

---

Value Strategy: Check Point Software Stock Price Value below-average critical

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	29
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	78
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	47
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	40

ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), Check Point Software shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Check Point Software. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 78, which means that the stock price compared with what market professionals expect for future profits is lower than for 78% of comparable companies, indicating a good value concerning Check Point Software's profit levels. But Price-to-Sales is 29 which means that the stock price compared with what market professionals expect for future profits is higher than for 71% of comparable companies, indicating a low value concerning Check Point Software's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 47 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on Check Point Software's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Check Point Software is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more

---

Growth Strategy: Check Point Software Growth Momentum low

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	26
PROFIT GROWTH
PROFIT GROWTH	23
CAPITAL GROWTH
CAPITAL GROWTH	64
STOCK RETURNS
STOCK RETURNS	37
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	27

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Check Point Software shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Check Point Software. Only Capital Growth has a good rank of 64, which means that currently professionals expect the company to grow its invested capital more than 23% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 26 which means that currently professionals expect the company to grow less than 74% of its competitors. Profit Growth with a rank of 23 and Stock Returns with a rank of 37 are also low (below 63% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Check Point Software is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more

---

Safety Strategy: Check Point Software Debt Financing Safety very solid

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	100
REFINANCING
REFINANCING	23
LIQUIDITY
LIQUIDITY	69
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	96

ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2022, the company Check Point Software has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Check Point Software is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Check Point Software. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 69, meaning the company generates more profit to service its debt than 69% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 23, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 77% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Check Point Software has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Check Point Software. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

---

Combined financial peformance: Check Point Software Top Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	40
GROWTH
GROWTH	27
SAFETY
SAFETY	69
COMBINED
COMBINED	76

ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Check Point Software (Systems Software, USA) shares have much better financial characteristics than comparable stocks. Shares of Check Point Software are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives) and show below-average growth (Growth Rank of 27) but are safely financed (Safety Rank of 96), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Check Point Software's financial characteristics. As the company Check Point Software's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 40) and low growth (Obermatt Growth Rank of 27), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 96) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.