Check Point stock returns
Check Point (CHKP) stock has fallen close to 7.0% since the start of May. The stock is down over 11.0% since April this year when we identified it as overvalued. Check Point stock had gained almost 26.0% in the first three months of this year and the stock has now gained 9.4% since the start of 2019.
Check Point stock is trading at $112.34, which is 15.4% below its 52-week high. CHKP stock has gained 11.4% annually in the last five years. In comparison, its sales have risen 6.6%, while earnings have risen 11.5% annually in the last five years. Check Point sales have grown at a slower rate compared to the cybersecurity industry. In the fourth quarter of 2018, IDC estimated the Worldwide Security Appliance revenue to rise by 16.7%. In comparison, Check Point experienced growth of just 1.9%.
CHKP stock is trading at a forward PE multiple of 17.4x. In comparison, its earnings are estimated to rise over 6.1% this year and by 6.4% in 2020. Its earnings are also expected to rise at a CAGR (compound annual growth rate) of 10.0% over the next five years, while sales might rise just over 4.0% in the next three years. CHKP stock still looks overvalued considering the PE multiple.
How does Wall Street view CHKP?
Out of the 36 analysts tracking CHKP, 13 recommend a “buy,” 22 recommend a “hold,” and one recommends a “sell.” The analysts have an average target price of $122.77, which indicates that the stock has an upside potential of 9.3% from current levels.