Yesterday, 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.
Tue, Mar. 10, 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.
Thu, Jan. 29, 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
Oct. 21, 2013, 11:18 AM
- Check Point (CHKP +3.7%) has guided on its Q3 call for Q4 revenue of $365M-$395M and EPS of $0.90-$0.98, in-line with a consensus of $385.2M and $0.96.
- Shares are rallying thanks to the guidance and Check Point's Q3 beat, which was aided by improving European macro trends (Check Point depends heavily on European sales) and $128M in buybacks. Investors are likely also pleased with a 12% Y/Y increase in the company's deferred revenue balance to $566.8M (exceeded rev. growth of 4%).
- Security hardware peer Fortinet (FTNT +1.7%) is also higher. While Check Point's top-line growth has been better than that posted by the security units of firewall rivals Cisco and Juniper, it has trailed that of smaller upstarts such as Fortinet, Palo Alto Networks, and FireEye. "We have a lot of competition and we need to grow faster," said CEO Gil Shwed on the CC.
Sep. 20, 2013, 11:23 AM
- FireEye's (FEYE) IPO is even stronger than Rocket Fuel's. Shares opened at $40.30 and are currently at $40.61, up 103.1% from an elevated IPO price of $20.
- The cybersecurity hardware/software firm has a market cap of $4.77B, or a whopping 57x 2012 revenue.
- A couple of industry peers are rallying in sympathy: PANW +3.9%. CHKP +1.6%.
- S-1, IPO preview, 1H results
May 30, 2013, 4:29 PMPalo Alto Networks (PANW) now -13.9% AH in response to its mixed FQ3 results. With shares trading at lofty multiples, there was little margin for error. In its PR, Palo Alto mentions seeing a "touch macroeconomic environment" (peers can sympathize), but doesn't give a specific reason for its revenue miss. Revenue growth of 54% is a slowdown from FQ2's 70%. Still, deferred revenue rose 17% Q/Q to $219.3M. Opex +70% Y/Y to $80M, with sales/marketing spend +71% to $51.7M (51% of revenue). CC getting started (webcast), guidance should be provided. Off in sympathy: CHKP -1.2%. FIRE -2.2%. | Comment!
Apr. 10, 2013, 4:35 PMFortinet (FTNT) -13.5% AH after warning it expects Q1 revenue of $134M-$136M and EPS of $0.10, below a consensus of $140.4M and $0.12. Billings are pegged at $147M-$149M, below guidance of $158M-$162M. The company blames a failure to close a few U.S. service provider deals (F5's warning also cited telco demand), EMEA/Latin America weakness, and inventory shortages and product timing issues. Asia-Pac and U.S. enterprise demand was healthy. With shares trading at 36x 2013E EPS, there wasn't much room for error. Did Ken Goldman's departure play a role? CC at 5PM ET (webcast). CHKP -1.3%. PANW -0.8%. FIRE -1.5%. | Comment!
Mar. 25, 2013, 10:16 AMLazard cuts Check Point (CHKP -1.9%) to Neutral; the firm says channel checks indicate share losses to Palo Alto Networks (PANW) are growing. Palo Alto's next-gen firewalls are causing headaches for incumbent firewall vendors Check Point, Cisco, and Juniper thanks to their ability to support deeper content analysis on an integrated platform. The company recently bragged of an 85% win rate in deals it competes for. | Comment!
Feb. 12, 2013, 1:51 PMSecurity hardware stocks rally on expectations Pres. Obama will issue an executive order meant to bolster government spending on cybersecurity following tonight's State of the Union. Intrusion prevention system leader SourceFire (FIRE +8.8%), which received 28% of its sales from the U.S. government in Q3, is the biggest winner, but Fortinet (FTNT +4.3%), Check Point (CHKP +1.2%), and Palo Alto Networks (PANW +1.1%) are also higher. | 3 Comments
Jan. 31, 2013, 3:59 PMStrong earnings from Citrix, Fortinet, and SGI have translated into solid gains for a number of enterprise IT stocks. Winners include security hardware firms Sourcefire (FIRE +4.9%), Palo Alto Networks (PANW +2.8%), and Check Point (CHKP +3%), and server adapter card/interconnect switch makers Mellanox (MLNX +6.2%) and Emulex (ELX +2.6%), WAN optimization leader Riverbed (RVBD +1.7%), and Citrix virtualization/cloud management rival Red Hat (RHT +2%). | Comment!
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