Check Point Software Technology Ltd. (CHKP) recently hit a new multi-year high at $42.06 after reporting excellent Q3 results that came in 7% ahead of expectations. With an average earnings surprise of 5% over the last four quarters and rising estimates, this Zacks #1 rank stock is a momentum contender.
Company Description
Check Point Software Technologies Ltd. develops a range of software products and services for information technology security worldwide. The company was founded in 1993 and has a market cap of $8.7 billion.
Although CHKP has been trending higher for most of the last year on a stronger global economy, shares took a big jump on Oct 20 after the company reported solid Q3 results that came in ahead of expectations.
Third-Quarter Results
Revenue for the period was up 17% from last year to $273 million. Earnings also came in strong at 59 cents, 7% ahead of the Zacks Consensus Estimate, lifting the company’s average earnings surprise to 5% over the last four quarters.
Check Point noted that its solid results were driven by strength in network security products and strong regional growth in America and Asia Pacific.
Buying Shares Back
The company was also busy buying shares back over the quarter, purchasing 1.44 million shares for $50 million.
Balance Sheet
Check Point’s balance sheet looks great too, with cash and equivalents of $439 million, with no debt.
Estimates
The analysts were quick to raise their estimates on the good quarter, with the current year adding 8 cents in the last week to $2.30 and the next-year estimate up 11 cents to $2.56, a solid 11% growth projection.
In spite of the gains, the valuation picture still looks good, with a forward P/E of 18X against its peer average of 24X.
2-Year Chart
On the chart, shares have been strong for the last 18 months, recently jumping higher on the good quarter. The MACD below the chart is bullish too, with the short-term average advancing ahead of the long-term average, Look for support from the trend line and short-term low, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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