Check Point’s Slowing Growth Despite New Products Prompts Analyst Downgrade
B of A Securities analyst Tal Liani downgraded Check Point Software Technologies Ltd (NASDAQ:CHKP) from Buy to Neutral and lowered the price target from $205 to $195.
On Tuesday, Check Point reported fiscal third-quarter revenue growth of 7% to $635.10 million, almost inline with the analyst consensus estimate of $635.14 million. Adjusted operating margin declined to 43% from 45% the prior year.
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Given the company’s modest growth trajectory, the valuation seems stretched, as per Liani.
The analyst expected a recovery in billings next quarter despite the quarter’s weak billings growth of 5.8% year-over-year, which fell short of the Street’s 8.2% expectation.
However, his main concern is the overall low growth trajectory despite new products, portfolio additions, and ongoing go-to-market challenges.
The market seeks visibility toward double-digit …
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