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, notable return on equity, reasonable valuation levels and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 2.25, which demonstrates the ability of the company to cover short-term liquidity needs.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Software industry and the overall market, CHECK POINT SOFTWARE TECHN's return on equity exceeds that of both the industry average and the S&P 500.
- CHECK POINT SOFTWARE TECHN has improved earnings per share by 15.9% 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 ($3.17 versus $2.55).
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. Check Point Software has a market cap of $9.43 billion and is part of the technology sector and computer software & services industry. The company has a P/E ratio of 16.3, below the S&P 500 P/E ratio of 17.7. Shares are down 13.4% 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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