It's been a good week for Check Point Software Technologies Ltd. (NASDAQ:CHKP) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.3% to US$181. Results were roughly in line with estimates, with revenues of US$627m and statutory earnings per share of US$1.74. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 34 analysts covering Check Point Software Technologies are now predicting revenues of US$2.56b in 2024. If met, this would reflect a reasonable 3.1% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$7.40, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.56b and earnings per share (EPS) of US$7.38 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 8.2% to US$186despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Check Point Software Technologies' earnings by assigning a price premium. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Check Point Software Technologies, with the most bullish analyst valuing it at US$215 and the most bearish at US$110 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Check Point Software Technologies' growth to accelerate, with the forecast 6.3% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. So it's clear that despite the acceleration in growth, Check Point Software Technologies is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Check Point Software Technologies going out to 2026, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
