Check Point Earnings: Growth Still Hampered by Delayed Refresh Cycle; Shares Undervalued

Narrow-moat Check Point Software Technologies reported third-quarter numbers that were slightly above the FactSet consensus and company guidance. Revenue was above the midpoint and earnings per share came in at the very top end of the guidance ranges. Overall, total revenue growth remained modest at 3% as customers continued to delay refreshing their firewall appliances, which resulted in product and license revenue declining 14%. We are updating our model for the latest developments but do not anticipate a material change to our $150 fair value estimate. At current levels, the shares look undervalued.