Check Point Earnings: First Quarter in Line but Cybersecurity Market Appears To Be Softening

Narrow-moat Check Point Software Technologies reported first-quarter numbers that were slightly above FactSet consensus and the midpoints of guidance on revenue and EPS. However, on the call management indicated customers are still hesitant and it was not yet seeing budgets being opened for major purchases. This is leading to a more competitive environment with at least one major competitor announcing an aggressive pricing strategy. Consequently, an uptick in sales growth is more likely to be seen in the second half of fiscal 2024. Shares declined around 4% intraday in a down day for most of the sector. We don’t expect to make a material change to our $150 fair value estimate. At current levels, the shares look fairly valued.