Check Point Software Technologies Ltd. (CHKP) beat quarterly profit expectations propelled by the need for security networks and remote solution systems as more people continued to work from home during the coronavirus pandemic.
Check Point said Wednesday adjusted earnings per share in the second quarter rose 15% to $1.58 year-on-year beating analysts’ estimates of $1.44 a share. Total revenue increased 4% to $506 million during the reported period with analysts expecting $488 million.
“We delivered solid second quarter results driven by strong sales execution despite the rising impact of the COVID-19 pandemic” said Check Point CEO Gil Shwed. “Sales increased across multiple categories and segments, including our advanced technologies such as cloud, endpoint, and high-performance network security.”
The coronavirus pandemic has pushed forward the need for companies to shift to the cloud. Furthermore, cyber-attacks and breaches on networks that manage critical infrastructure for energy, manufacturing, transportation, and utilities have increased during the reported quarter, the company said.
Shwed added that Check Point extended its Infinity platform with new Quantum appliances and newly expanded CloudGuard family. The new CloudGuard provides a fully-automated platform to protect cloud deployments and workloads, and manage security through a single pane of glass. It streamlines and simplifies cloud security, is designed to prevent advanced cyber-attacks from impacting organizations’ cloud environments, and enables them to take advantage of the speed and agility of cloud.
Shares in Check Point have been on a gaining path since dropping to a low in March and are now trading 12% higher than at the start of the year.
Oppenheimer analyst Shaul Eyal has a Buy rating on the stock with a $126 price target, saying that he expects a consistent quarterly $325 million share buyback performance.
“We continue to view CHKP as a defensive name with a strong balance sheet and no debt, stable FCF, and a predictable business model,” Ayal wrote in a note to investors. “The work-from-anywhere (WFA) theme remains a tailwind for CHKP’s remote access VPN product, CloudGuard, and security appliances.”
Overall, Wall Street analysts are sidelined on the stock. The Hold consensus breaks down into 13 Holds and 3 Sells versus 2 Buys. The $112.82 average price target now implies 9.3% downside potential in the coming 12 months. (See Check Point stock analysis on TipRanks).
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