2023-05-01 14:20:50 ET
Check Point Software ( NASDAQ: CHKP ) shares fell more than 4% Monday as the cybersecurity company reported first-quarter results that failed to impress investors.
For the period ending March 31, Check Point ( CHKP ) earned $1.80 per share, excluding one-time items, on revenue that rose 4% from a year ago, to $566M.
Israel-based Check Point ( CHKP ) added that security subscription revenue rose 13% year-over-year to $228M and deferred revenue rose 8% year-over-year to $1.8B.
Analysts were expecting the company to earn $1.73 a share and generate $568.69M in revenue.
In addition, Check Point ( CHKP ) spent $325M during the period buying back 2.6M worth of stock during the period.
Zscaler ( ZS ), Palo Alto Networks ( PANW ) and a few other cybersecurity stocks were lower in early trading on back of Check Point's ( CHKP ) quarterly results.
Update: On the earnings call, Check Point ( CHKP ) maintained its 2023 revenue estimate of $2.34-$2.51 billion and earnings per share excluding one-time items of $7.70-$8.30 - versus analysts' expectations of revenue of $2.43 billion and adjusted EPS of $7.98. Revenue in 2022 reached $2.33 billion.
For the second quarter, Check Point projected revenue of $570-$605 million and adjusted EPS of $1.85-$1.95. Analysts had forecast EPS of $1.88 on revenue of $596 million.
On its earnings call, Check Point ( CHKP ) said it expects sales to be between $570M and $605M, with adjusted earnings between $1.85 and $1.95 per share. Analysts expected the company to generate $596M in revenue and $1.88 per share in adjusted earnings.
For the full-year Check Point ( CHKP ) expects sales to be between $2.34B and $2.51B, compared to analysts' estimates of $2.43B in sales.
Additionally, CEO Gil Shwed said the company could take advantage of industry consolidation.
Update 2: BMO Capital analyst Keith Bachman downgraded Check Point ( CHKP ) to market perform after the results, noting that product revenues are likely to stay "weak" in 2023.
"Further, we do not envision CHKP’s newer offerings, such as SD-WAN, to improve subscription revenue growth this year," Bachman wrote in an investor note. "Hence, we think weak product revenues, and likely billings, will keep the stock range-bound for the year."
More on Checkpoint Software and cybersecurity
- As IT budgets tighten, cybersecurity companies see growing demand
- Wolfe Research starts coverage on Check Point, calls it 'cash generating machine'
- Check Point Software falls as Raymond James downgrades heading into Q1
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Check Point Software shares slump 4% as sales results disappoint