Checkpoint Software (CHKP) Mentioned Cautiously at Citi, 'we’re guarded'
Citi analyst Fatima Boolani reiterated a Neutral rating and $135.00 price target on Checkpoint Software (NASDAQ: CHKP)
The analyst comments "An underwhelming 3Q – product -14% YoY; billings -3% YoY PF for slipped deal, +$8M from Perimeter81, flattish FCF YoY ex- M&A – and 4QE revs guide demonstrate invoicing duration volatility, form-factor mix shifts, and accelerated product decay continue to limit growth optics and results consistency, and our confidence in the rate and pace of fundamentals’ recovery. Though CY24E is likely to see re-acceleration-from-LSD-growth potential on +MSD RPO trends, a more strategic portfolio, lapping-of troughed FW demand and invoicing duration, and more visible top-line contribution from Infinity (5 years in the making, just breached 10% of revs), and EPS growth is an attractive backstop, we’re guarded. Economic sentiment has to turnaround, sales productivity needs marked ROI against recent investments, and capex/Sales&Marketing spend likely stays elevated for catch-up mind/market share (curbing OPM/FCFM expansion) given CHKP’s late SASE entry. With these reservations and CitiE topline only moving slightly, we reaffirm Neutral and $135 PT."
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Shares of Checkpoint Software closed at $129.45 yesterday.