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Thu, Jan. 28, 3:52 PM
- Check Point (CHKP +2.1%) is up moderately after beating Q4 estimates. On its earnings call, the firewall/security software provider guided for Q1 revenue of $395M-$410M and EPS of $0.99-$1.05 vs. a consensus of $404.8M and $1.04.
- 2016 EPS guidance is at $4.45-$4.60, in-line with a $4.55 consensus. With Check Point having strong European exposure, forex remains a major headwind.
- Buyback continue at an aggressive pace: $249M was spent in Q4 to repurchase 3M shares, and $986M over the whole of 2015 to buy back 12M shares. Healthy software subscription growth led the deferred revenue balance to rise 16% Y/Y in Q4 (outpacing revenue growth of 9%) to $906M. Product/license revenue rose 7% Y/Y to $173.9M; software blade subscription revenue rose 22% to $88M.
- Check Point's Q4 results, earnings release
Wed, Jan. 13, 9:33 AM
- Israel's TheMarker reports firewall/security software vendor Check Point (CHKP +2.1%) is in preliminary talks to buy privileged account security software leader CyberArk (NASDAQ:CYBR). No word on a potential deal price.
- Oppenheimer's Shaul Eyal considers the odds of a deal low. given Check Point has historically opted for smaller/cheaper purchases. "We note the two companies have been already cooperating and partnering in recent years on various productsb both companies have considerable R&D centers in Israel. While CHKP carries $3.6B of cash on its balance sheet and it appears that financing such a hypothetical transaction is no hurdle, it would certainly mark a deviation from its recent years' strategy of acquiring tuck-in technologies (Lacoon and Hyperwise in 2015 for a combined sub-$200M)."
- CyberArk has surged above $45 on the report. Following the jump, CyberArk has a $1.48B market cap to Check Point's $14.5B.
Wed, Jan. 6, 1:46 PM
- Barclays' Raimo Lenschow has downgraded firewall/security software firm Check Point (CHKP -1.9%), cloud talent management software firm Cornerstone OnDemand (CSOD -2.7%), and data warehousing hardware/software provider Teradata (TDC -3.8%) to Underweight. Cloud HR/financials software vendor Workday (WDAY -3.6%) and e-commerce software/services provider Demandware (DWRE -2.9%) have been cut to Equal Weight.
- Cloud HR software firm Paycom (PAYC -1%), on the other hand, has been upgraded to Overweight on a belief consensus estimates are too low. Meanwhile, BofA/Merrill has launched coverage on Demandware at Buy.
- Regarding Check Point, Lenschow says he prefer security tech firms that are gaining share - his top three ideas are Palo Alto Networks, Imprivata, and Rapid7. He sees security IT spend rising 7% in both 2016 and 2017, a rate on par with 2015's.
- Regarding Cornerstone, Lenschow is worried about slowing top-line growth, a lack of profits, and growing competition. Regarding Workday, he's concerned about competition from SAP/Oracle, a high valuation, and the relatively limited impact of its financials offerings on sales growth.
- The downgraded names are underperforming amid a 1.1% Nasdaq drop.
Oct. 26, 2015, 12:54 PM
- In addition to beating Q3 estimates (moreso on EPS than revenue), Check Point (CHKP +0.3%) guided on its earnings call for Q4 EPS of $1.10-$1.18 vs. a $1.11 consensus. Revenue guidance is more cautious: $440M-$470M vs. a $456.5M consensus.
- Buybacks continue to lift the firewall/security software vendor's EPS: Check Point spent $250M in Q3 to repurchase 3.1M shares. $245M was spent on buybacks in Q2.
- Product/license revenue rose 7% Y/Y to $135.2M, software blade subscription revenue 18% to $79.6M, and software update/maintenance revenue 7% to $189M. Subscription growth helped the deferred revenue balance rise 17% to $772M.
- GAAP operating expenses rose 15% Y/Y to $199.2M. Check Point ended Q3 with $3.6B in cash/investments, and no debt.
- Q3 results, PR
Jul. 22, 2015, 9:31 AM
- Check Point (NASDAQ:CHKP) is rallying after beating Q2 estimates and (thanks to software subscription growth) reporting an 18% Y/Y increase in its deferred revenue balance to $780M (above revenue growth of 9%).
- The firewall/security software vendor once more guided in-line on its CC (webcast): Q3 revenue of $392M-$410M and EPS of $0.92-$1.02 vs. a consensus of $403.1M and $0.97. A weak euro remains a headwind.
- Key numbers: Product/license revenue +6% Y/Y to $132.3M. Software blade subscription revenue +20% to $76.6M. Software update/maintenance revenue +7% to $186.4M. GAAP operating expenses +14% to $196.3M - sales/marketing spend totaled $92.2M, G&A $22.3M, and R&D $36.2M.
- $245M was spent on buybacks. Check Point ended Q2 with $3.61B in cash/investments, and no debt.
Jul. 9, 2015, 2:26 PM
- Security tech plays are outperforming amid a 0.4% gain for the Nasdaq. The rally comes a day after the NYSE suffered a lengthy outage, United Airlines grounded flights, and the WSJ's site briefly went down.
- All three incidents have been blamed on tech issues rather than attacks/breaches, but questions linger. FBI director James Comey: "We do not see any indication of a cyber breach or cyber attack ... But again, in my business, you don't love coincidences." Ex-White House cybersecurity advisor Richard Clarke: "Right now, anybody who says they know for sure what happened before the forensic work has been done is kidding themselves."
- Also: In a bit of good PR/convenient timing for the group, representatives from the PureFunds Cyber Security ETF (HACK +1.6%) rang the NYSE's opening bell today. The NYSE says the event was booked months in advance.
- Standouts include CyberArk (CYBR +4%), FireEye (FEYE +2.7%), KEYW Holding (KEYW +5%), Fortinet (FTNT +2.4%), Check Point (CHKP +2.6%), Imperva (IMPV +2.9%), Zix (ZIXI +2.8%), Proofpoint (PFPT +2.7%), and Vasco (VDSI +2.5%). Barracuda (CUDA +2%) reports after the bell.
Jun. 24, 2015, 11:54 AM
- Baird has downgraded Fortinet in response to a healthy 2015 run-up, and many security tech peers have joined the company in seeing profit-taking (HACK -1.3%). The Nasdaq is down just 0.1%.
- Decliners include FireEye (FEYE -2.3%), Qualys (QLYS -6.7%), KEYW (KEYW -5.1%), Check Point (CHKP -1.9%), Barracuda (CUDA -2.5%), Vasco (VDSI -2.5%), and Proofpoint (PFPT -1.8%). UBS downgraded FireEye to Neutral two days ago while citing valuation, and also cut Symantec to Sell. RBC has hiked its Qualys target by $6 to $44 today, while reiterating a Sector Perform.
- The selloff comes as an Office of Personnel Management (OPM) official states up to 18M Social Security numbers may have been stolen in a recent breach. FireEye recently ID'd a Chinese group it believes was responsible for the hack.
- Meanwhile, the WSJ has published a column about Check Point's efforts to expand beyond its core firewall market, and thereby keep the likes of Fortinet and Palo Alto Networks at bay. Gartner estimates Check Point had a 22.7% 2014 firewall share, well above #2 Cisco's (NASDAQ:CSCO) 15.9% but down from a 2013 share of 24%.
May 27, 2015, 9:55 AM
- "Current investments likely won't be productive for sometime, which means EPS growth will likely slow in FY15," writes Morgan Stanley, downgrading Check Point (NASDAQ:CHKP) to Underweight. "We continue to look for a high-single digit EPS CAGR through FY17."
- MS thinks a firewall refresh cycle is peaking and believes Check Point has lost some share in the segment - next-gen firewall leader Palo Alto Networks has been seeing huge growth. It also thinks subscription billings growth softened in 2014, and that margins are declining.
- Check Point had risen over 35% from last summer's lows going into today. Shares currently go for 21x 2015E EPS and 19x 2016E EPS.
- Regarding Check Point's "current investments": Earlier this year, the company bought startups Lacoon and Hyperwise to strengthen its threat-prevention software/services offerings. It also launched a malware-protection software tool called Threat Extraction.
Mar. 10, 2015, 2:55 PM
- Security tech plays, several of which were huge gainers in February, have been hard hit (HACK -2.6%) amid a market selloff. Major decliners include FireEye (FEYE -4%), CyberArk (CYBR -6.6%), Proofpoint (PFPT -4.7%), and Vasco (VDSI -5.5%). Imperva is off sharply after announcing a 3M-share offering.
- FBN Shebly Seyrafi reiterated his bullish stance on the group today, forecasting security IT spend will grow 14% this year (up from 2014's 11%). Palo Alto Networks (PANW -0.5%) and Fortinet (FTNT -2.4%) are his favorites due to positive checks, but he also likes other names, mentioning FireEye and Check Point (CHKP -0.2%) in particular. Palo Alto and Check Point are seeing only modest losses.
- Earlier today, Check Point launched Threat Extraction, a malware-protection tool that proactively extracts and reconstructs documents traveling over a network with known safe elements (so as to remove the threat of malware). The product launch, which furthers Check Point's efforts to grow its software exposure, follows the company's purchase of threat-prevention software startup Hyperwise.
Jan. 29, 2015, 11:16 AM
- Check Point (NASDAQ:CHKP) has guided on its Q4 CC (webcast) for 2015 revenue of $1.6B-$1.65B and EPS of $3.90-$4.02. The former is above a $1.59B consensus in spite of major forex pressures - Check Points depends heavily on European sales. The latter is below a $4.07 consensus due to Check Point's plans to spend aggressively to improve its positioning in a very competitive security appliance/software market.
- The company has also announced it's upping its total buyback authorization by $500M to $1.5B, and its quarterly authorization by $50M to $250M. Check Point spent $195M on buybacks in Q4, and $765M over the whole of 2014.
- With a strong IT security spending environment providing a boost, product/license revenue (drives future maintenance/update revenue) rose 6% Y/Y in Q4 to$162M, and software blade subscription revenue 20% to $72.3M. Update/maintenance revenue grew 7% to $186.2M.
- Operating expenses rose 11% to $191.4M (compares with 9% revenue growth), and the deferred revenue balance grew a healthy 17% to $784M.
- Q4 results, PR
Dec. 17, 2014, 1:42 PM
- "Our broader sector call is that enterprise spending on security IT will again be very strong in 2015, if not stronger than in 2014. Throughout 2014, we flagged PANW, FTNT and PFPT as our top security picks and we’re now adding CHKP to this short-list," says Deutsche's Karl Keirstead. He's upgrading the firewall/security software vendor to Buy, and hiking his target by $20 to $90.
- Keirstead considers Check Points's (CHKP +1.9%) multiples (18x and 11.7x 2015E EPS and free cash flow, respectively) attractive given its security exposure and accelerating growth (potentially 11% Y/Y in Q4 vs. 3%-4% for much of 2013).
- With the aforementioned peers having significantly outperformed Check Point this year, Keirstead thinks "investors are likely to look more aggressively at CHKP shares as a cheaper way to play the security theme with more limited downside risk."
- Shares are $2 away from a high of $78.78. They rallied in October in response to a Q3 beat and healthy Q4 guidance. A weak euro and Palo Alto Networks' firewall share gains have been seen as potential headwinds.
Oct. 23, 2014, 12:03 PM
- Check Point (CHKP +4.2%) beat Q3 estimates and offered healthy Q4 guidance: Revenue of $395M-$430M and EPS of $0.99-$1.09 vs. a consensus of $410.3M and $1.03.
- Fortinet (FTNT -0.1%) posted a Q3 beat, reported strong billings growth, and issued above-consensus Q4 revenue guidance. EPS guidance was light due to aggressive spending.
- Several security tech peers are outperforming on a day the Nasdaq is up 1.7%. PANW +4.4%. FEYE +4.5%. PFPT +4.9%. QLYS +2.7%. The numbers follow downbeat guidance from IBM, SAP, and VMware, and arguably highlight security's growing share of IT spend.
- Oppenheimer is reiterating an Outperform and $30 target on Fortinet, and notes the company's new billings guidance implies 26% 2014 growth at the midpoint (up from 22%). It thinks the UTM hardware vendor's performance is being driven by strong high-end appliance sales, product refreshes, and the fruits of major sales/marketing investments.
Jul. 24, 2014, 1:57 PM
- Fortinet (FTNT +6.7%) beat Q2 estimates with the help of 33% Y/Y billings growth (exceeded rev. growth of 25%) and a 95% Y/Y increase in $500K+ deals.
- The company guided in its CC slides (.pdf) for Q3 revenue of $182M-$185M and EPS of $0.11 vs. a consensus of $177.3M and $0.13. Full-year guidance is for revenue of $735M-$740M and EPS of $0.47-$0.48 vs. a consensus of $714M and $0.50. Billings are expected to grow ~22% to $835M-$840M.
- On its CC (transcript), the UTM hardware leader suggested its light EPS guidance is due to a heavy investment pace, including aggressive sales hiring. It also mentioned Americas sales were up 40% Y/Y, fueled by a 73% increase for U.S. enterprise.
- Meanwhile, Vasco Data (VDSI +16.9%) trounced Q2 estimates and hiked its guidance for 2014 revenue from traditional businesses to $175M-$180M from $168M-$172M. The company notes adoption of new productions leveraging its Cronto visual authentication tech (acquired last year) has been strong.
- FireEye (FEYE +3%), Palo Alto Networks (PANW +2.8%), Proofpoint (PFPT +3.6%), and Check Point (CHKP +1.7%) are trading higher. Proofpoint reports after the bell; Check Point provided a Q2 beat and healthy top-line guidance yesterday.
- On the other hand, Barracuda (CUDA -5.9%) is selling off. JPMorgan attributes the decline to Fortinet's CC remarks about rapidly growing sales to mid-sized businesses - Barracuda depends heavily on them - with the help of new resellers. The firm argues the concerns are overblown, particularly since Fortinet is more focused on larger mid-sized businesses.
Apr. 29, 2014, 3:55 PM
- Though Check Point's (CHKP -4.3%) Q1 results were roughly in-line, the firewall vendor guided on its CC (transcript) for Q2 revenue of $340M-$375 ($357.5M midpoint) and EPS of $0.82-$0.90, slightly unfavorable to a consensus of $361.1M and $0.88.
- Check Point says it's seeing healthy demand in North America (20% Y/Y product sales growth in Q1), but also "saw some softness in international markets, especially Asia." The company chalks this up to both macro conditions and "a slow start to the year" following a strong Q4.
- Check Point's deferred revenue balance rose 13% Y/Y in Q1 to $660M. Overall product and software subscription revenue rose 10% Y/Y, better than total revenue growth of 6%. $183M was spent on buybacks.
- The company faces tough competition from next-gen firewall leader Palo Alto Networks (46% Jan. quarter revenue growth) and other upstarts, but has been faring better than traditional firewall rivals Cisco and Juniper.
- Q1 results, PR
Nov. 12, 2013, 3:14 PM
- Check Point (CHKP +2.8%) has struck a deal with the Israeli government to pay NIS500M ($142M) in taxes on NIS1.7B ($482M) in profits that were deemed "trapped" (incapable of being distributed without a tax hit).
- Check Point had over $3.6B in cash/investments at the end of Q3, and no debt. The firewall vendor spent $128.3M of its cash on buybacks during the quarter.
Nov. 6, 2013, 10:28 AM
- After pricing its 4.14M-share IPO at $18 (the low end of an $18-$21 range), Barracuda Networks (CUDA) opened at $22 and is currently trading at $22.86, up 27%. That gives the security hardware vendor a market cap of $1.14B, or 5.7x FY13 (ended Feb. '13) sales.
- Peers Check Point (CHKP +1.6%) and FireEye (FEYE +1.9%) are up slightly, FireEye delivered a scorching IPO in September.
- S-1, IPO filing/recent results, IPO preview
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