CHKP

Check Point Software Technologies Ltd

TMT


Presented:06/02/2016
Price:$85.77
Cap:$15.18B
Current Price:$207.83
Cap:$22.86B

Presented

Date06/02/2016
Price$85.77
Market Cap$15.18B
Ent Value$14.11B
P/E Ratio21.88x
Book Value$20.38
Div Yield0%
Shares O/S176.99M
Ave Daily Vol1,496,957
Short Int8.37%

Current

Price$207.83
Market Cap$22.86B
Check Point Software Technologies Ltd. engages in the development and market of software and hardware solutions for information technology security. Its products include threat prevention, next generation firewalls, mobile security, and security management. Its solutions caters to the following: point of sale systems, automated teller machines, private and public cloud, telecommunications providers, The company was founded by Gil Shwed, Marius Nacht, and Shlomo Kramer in July 1993 and is headquartered in Tel Aviv, Israel.

Publicly traded companies mentioned herein: Check Point Software Technologies Ltd (CHKP), Cisco Systems Inc (CSCO), Microsoft Corporation (MSFT), Palo Alto Networks Inc (PANW)

Highlights

The backdrop for network security companies is likely to continue to improve over the foreseeable future as companies scale up their defenses against cyber attacks/ threats. Up until a few years ago, IT managers would buy the best individual solutions across firewall, app control, intrusion protection, etc.; today, larger enterprises prefer using one vendor and this has led to consolidation in the industry. The presenter thinks shares of Check Point Software Technologies (CHKP) are an excellent way to play the trend and he is long the stock. Management has ceded some share by not spending as aggressively as the competition on marketing, but this issue can be addressed. In his opinion CHKP is “underappreciated and could be a core position in any portfolio”. At $85, the risk/ reward is favorable as CHKP has ~$1.3 billion in cash on the balance sheet, and advanced persistent threats (APT) and mobile security solutions could drive upside. Continuing to apply reasonable mid-teens multiples to future EPS and/ or FCF per share suggests 25% - 30% upside potential (to at least $105) over the next 12 - 24 months.

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Idea Discussion

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