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UPDATE: Summit Insights Starts Checkpoint Software (CHKP) at Buy

March 31, 2022 4:30 PM EDT
Get Alerts CHKP Hot Sheet
Price: $126.29 -2.12%

Rating Summary:
    18 Buy, 23 Hold, 5 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 24 | New: 19
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(Updated - April 1, 2022 4:23 AM EDT)

Summit Insights initiates coverage on Checkpoint Software (NASDAQ: CHKP) with a Buy rating and a price target of $160.00.

The analyst comments "We initiate Checkpoint Software (CHKP) with a BUY rating and establish our initial price target of $160. Checkpoint is a solid defensive stock for an elevated security spending environment amidst a rising interest rate regime. Checkpoint has been ceding share in the highly competitive Americas markets due to under-investment in S&M and over-reliance on channel partners to obtain new sales. We believe the company now has the products (Quantum Light Speed Firewalls and SD-WAN enabled firewalls) and subscriptions offerings that address customer pain points and primary use cases (Cloud, User, and Applications). More importantly, the company desires to hire salespeople aggressively (25% more quota-carrying headcount) to stem share losses and accelerate growth. We expect the subdued sentiment to improve through 2022 and beyond as the company's investments in sales begin to pay off. While margins make take a little bit of a hit due to investments, we expect margin dollars to increase as the company's revenue growth accelerates. We expect the sentiment to improve on beats and raises, driving the stock higher. We expect revenue to accelerate in 2022 and beyond as the investments begin to pay off. In addition, the company expects to buy back shares worth $325 million each quarter to provide support for the stock. Given the confidence in the company's product portfolio, ability to execute, and belief that the investments will likely pay off, we initiate coverage with a BUY rating. Our $160 PT translates to 19x C2023 EPS of ~$8.40."

For an analyst ratings summary and ratings history on Checkpoint Software click here. For more ratings news on Checkpoint Software click here.

Shares of Checkpoint Software closed at $138.26 yesterday.


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