Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- CHKP's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CHKP has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, CHKP has a quick ratio of 2.16, which demonstrates the ability of the company to cover short-term liquidity needs.
- CHECK POINT SOFTWARE TECHN has improved earnings per share by 18.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHECK POINT SOFTWARE TECHN increased its bottom line by earning $2.55 versus $2.12 in the prior year. This year, the market expects an improvement in earnings ($3.19 versus $2.55).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Software industry average. The net income increased by 17.2% when compared to the same quarter one year prior, going from $127.99 million to $149.98 million.
Check Point Software Technologies Ltd. develops, markets, and supports a range of software, and combined hardware and software products and services for information technology (IT) security worldwide. The company has a P/E ratio of 27.3, above the average computer software & services industry P/E ratio of 16.9 and above the S&P 500 P/E ratio of 17.7. Check Point Software has a market cap of $9.72 billion and is part of the
industry. Shares are down 10.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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