Stockchase Opinions

Joe Terranova Check Point Software Tech CHKP-Q BUY Mar 03, 2025

A cybersecurity name that flies beneath the radar. A reasonable 30x PE.

$221.090

Stock price when the opinion was issued

computer software processing
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BUY ON WEAKNESS

In cyber security. Offers stable growth and is well-managed. Doesn't like that they pay no dividend. It's a mature company, good. Low beta. Perhaps buy this in a recession. Prefers this to Palo Alto. 

TOP PICK

IT security solutions provider. Last year, rested on their laurels. Change in management, upped game. His 12-month price target is $151.50. No dividend.

(Analysts’ price target is $138.27)
BUY

Next to semiconductors, cybersecurity is one of the great secular growth areas. Hacks are proliferating. Making new highs. An area you have to own for the next several years. 

PAST TOP PICK
(A Top Pick Mar 29/23, Up 21%)

In the face of increasing competition, restructured its businesses. Reported extremely good numbers, stuck to guidance. Might explain why PANW selloff today not hurting them as much.

BUY ON WEAKNESS

Likes this space (security), but his issue is its valuation. Tech is at highs now, so find a better entry level.

BUY

Cybersecurity has become such an important area. Governments around the world are looking as it. Huge investments in coming years at government and corporate levels. Strong secular growth. Need has increased because, since Covid, people no longer work in just one spot.

WATCH
PANW vs. FTNT vs. CHKP

He used to own CHKP. Both PANW and FTNT are strong businesses, market leaders in the space and taking market share away from CHKP.

Challenge is that PANW and FTNT are really strong in this industry. Good for the consumer, but may not be good for the businesses in that space. At 46x PE, PANW is really expensive, growth needed to justify that valuation is substantial, high valuation keeps him on the sidelines.

Look at the space as a whole to see if you want to be involved, rather than choosing just one player. Does like the aspect of customer "stickiness" in that once a customer signs up, switching costs are high.

HOLD

This sector has good secular growth, lots of cybersecurity issues, governments are investing a lot. Has done well.

WATCH

Growth will come from the fact that identity access management is a huge player because of all the ransomware. Identifies both outside and inside players.