- Price
- $138.10
- Fair value
- $201.00
- Discount
- 31.3%
- Uncertainty
- Medium
- LSEG rating
- 2.46
- Moat
- Narrow
- Next earnings
- 2026-11-02
- Next earnings is estimate
- No
- Company name
- Check Point
- Sector
- Cybersecurity software
- About
- Check Point Software sells cybersecurity products to more than 100,000 organizations. Its best-known products are network firewalls: security appliances and software that protect company networks. It also sells security for email, cloud, remote access (SASE), exposure management and AI systems. It makes money in three ways: product and license sales ($548 million in 2025), security subscriptions ($1,219 million) and software updates and maintenance ($958 million). Total revenue was $2,725 million in 2025, and about 80% of it is recurring. The company is based in Israel, where it does much of its research and development. Check Point has high margins and spends most of its free cash flow on share buybacks.
- Thesis
- The market prices Check Point at a discount because its growth stalled in 2026 while it changes how it sells. At the start of 2026, the new management changed the sales model, and firewall appliance sales fell. In April 2026, Check Point cut its 2026 revenue outlook to $2.77 billion to $2.85 billion, and the stock fell about 14% that day. Q2 2026 revenue grew only 1%, and product revenue fell 14%. Partner checks by Raymond James in July 2026 showed lower bookings and some customer losses. Investors also fear that platform rivals take share in firewalls and that AI changes how companies buy security. For the gap to close, three things must be true. Product revenue must stop falling, security subscriptions must keep growing at about 11% to 12%, and the about 300 new sellers that Check Point hires must raise sales in the first half of 2027, as management expects. Revenue must also meet the 2026 outlook, which needs about 6.5% growth in Q4 2026. The first evidence comes with the Q3 2026 report on November 2, 2026, which management expects to be the low point. The 2027 outlook in early 2027 and the first two quarters of 2027 show whether the new sales force works. If product sales recover, the gap can close over the next four to six quarters. The main risk is that the firewall business keeps losing share, so that Check Point becomes a low-growth company.
- Risks
- Product sales fall. Product revenue fell 14% in Q2 2026 after changes to the sales model. Partners reported lower bookings and some customer losses in July 2026. If firewall sales do not recover, future subscription and maintenance revenue also grows more slowly.
The sales reorganization and a new Chief Revenue Officer from May 2026 add execution risk. The about 300 new sellers add cost in 2026, and management expects their benefit only in the first half of 2027. Operating expenses rose 13% in Q2 2026.
Competition is strong. Platform companies such as Palo Alto Networks, Fortinet and CrowdStrike compete for firewall, cloud and AI security budgets. Several analysts prefer these rivals for AI security.
Check Point has its main offices and much of its research staff in Israel. A war in the region can disrupt operations, and it can make some customers less willing to buy.
Security flaws in its own products, such as the VPN flaw disclosed in June 2026 that attackers used, can hurt customer trust. Higher memory prices also lower the gross margin on appliances.
- Balance sheet
- Cash: $4.2B
Debt: $2.0B
Net cash: $2.2B
Debt due within 12 months: $0.0M
Last debt due: 2030
Check Point has more cash than debt. Its only debt is $2.0 billion of 0% convertible senior notes due December 15, 2030, which it issued in December 2025. The initial conversion price is about $243.65 per share. On conversion, Check Point pays the principal in cash, and it can pay the premium above the principal in cash or shares. Cash is cash, deposits and marketable securities, $4,203 million at June 30, 2026, up from $2,913 million a year earlier because of the note proceeds. Deferred revenue was $2,025 million at June 30, 2026, cash that customers paid for future service. The notes pay no interest, so interest cover does not apply. Check Point bought back shares for about $325 million in each of Q1 and Q2 2026, and in May 2026 the board added $2.0 billion to the buyback program.
As of 2026-06-30.
- Checkpoints
- Nov 2, 2026: Q3 2026 results: product revenue and the 2026 outlook. Pending. Watch: A smaller fall in product revenue, subscription growth near 12% and a kept 2026 revenue outlook pass; another product decline near 14% or a lower outlook fails.
Feb 2027 (estimate): Full-year 2026 results and 2027 outlook. Pending. Watch: Q4 revenue growth near 6.5% and a 2027 outlook with faster revenue growth pass; a 2027 outlook with growth near 2026 levels fails.
Jul 2027 (estimate): Q2 2027 results: the new sales force. Pending. Watch: Product revenue that grows from a year earlier after the hiring of about 300 sellers passes; product revenue that still falls fails.
- Recent events
- 2026-10-01: Check Point said that it will report Q3 2026 results on November 2, 2026.
2026-09-14: Check Point appointed Yoram Tietz, a Senior Advisor at General Atlantic and the former Managing Partner of EY Israel, to its Board of Directors.
2026-09-11: Wedbush downgraded Check Point, together with Fortinet, Varonis and Telos, and named CrowdStrike and Palo Alto Networks as its preferred AI cybersecurity stocks.
2026-07-30: Check Point reported Q2 2026 results. Revenue was $674 million, up 1%. Security subscription revenue was $333 million, up 12%, and product revenue fell 14%. Non-GAAP EPS was $2.55, up 8%. Check Point bought back about 2.5 million shares for about $325 million. Management kept its full-year guidance and said it will hire about 300 more sellers, with the benefit expected in the first half of 2027. It also launched an AI network firewall.
2026-07-15: Raymond James downgraded Check Point to Market Perform from Outperform. It said that partner checks showed lower bookings, a weak second-half pipeline and some customer losses, and that management changes disrupted sales.
2026-06-08: Check Point disclosed a security flaw in the Remote Access VPN and Mobile Access functions of some gateway configurations. It released a software update and said that attackers used the flaw to get into some customer environments.
2026-05-11: Check Point's board added $2.0 billion to the share buyback program.
2026-04-30: Check Point reported Q1 2026 results. Revenue was $668 million, up 5%, and non-GAAP EPS was $2.50, up 13%. It cut its 2026 revenue outlook to $2.77 billion to $2.85 billion from $2.83 billion to $2.95 billion because firewall appliance sales fell after changes to its sales model. It kept its non-GAAP EPS outlook of $10.05 to $10.85. Sherif Seddik became Chief Revenue Officer. The stock fell about 14% in early trading.