Check Point Software Technologies Ltd. Ordinary Shares (CHKP)

FairStock Score: 79/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am looking for businesses with durable economics, honest accounting, and a price that leaves room for error. Check Point sells cybersecurity infrastructure to enterprises, a field where switching costs and the installed base can create stickiness. The numbers show a high-quality profit engine: a 37.64% return on equity, a 28.77% profit margin in fiscal Q2 2026, $1.1 billion of trailing free cash flow, and an 8.0% free cash flow yield. The balance sheet is not debt-free—debt to equity is 0.72—but the Altman Z-Score of 4.97 suggests financial distress is not an immediate worry. However, the growth engine is sputtering: revenue growth of 1.26% and profit growth of -4.44% are not what I want from a technology franchise. Return on capital employed of 7.60% also hints that the business may not be compounding capital as efficiently as the headline ROE implies. Valuation is mixed. At the 2026-10-13 close of $134.99, the FairStock P/E is 13.85, P/B is 5.07, EV/EBITDA is 15.15, and Piotroski F-Score is a middling 5/9. Those are not absurd for a cash-generative security vendor, and the 8.0% FCF yield offers some support. But the Graham Number of $75.97, a conservative asset-and-earnings benchmark, sits far below the market price, producing a negative margin of safety of -77.69%. I would want either firmer revenue and profit growth or a wider discount before calling this a classic Graham bargain. The FairStock score of 79/100 and no Lynch category—because there are zero years of filed results in the dataset, against a three-year requirement—remind me to demand more evidence. A solid business, but the price still asks for patience.

In plain English: Check Point Software Technologies sells cybersecurity software and services that protect businesses’ networks, cloud systems, mobile devices, and connected equipment. The company is very profitable—it earned $193.8 million on $673.6 million of sales in fiscal Q2 2026, keeping about 29 cents of profit per sales dollar—but sales are growing slowly and profit recently declined. At the 2026-10-13 close of $134.99, the shares look moderately priced against earnings and cash flow, though not cheap by a conservative asset-based estimate.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer