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Check Point Software Technology’s (NASDAQ:CHKP) price target was raised to $155 from $150, with its rating maintained at Outperform by BMO Capital Markets analysts on Thursday.
They raised the firm’s price target following its earnings report, which the BMO analysts described as a “solid quarter,” resulting in their estimates moving higher.
Check Point reported third-quarter earnings of $1.77 per share, $0.10 better than the analyst estimate of $1.67, while revenue for the quarter came in at $578 million versus the consensus estimate of $571.63 million.
“CHKP reported billings growth of 8.0% y/y, which was ~1% above consensus expectations and accelerated from 5.5% y/y last quarter. We think that this is solid considering the ongoing negative impact from supply chain constraints and likely growing backlog. On a q/q basis, billings contracted 2.1%, which was the strongest September quarter q/q growth rate of the past three year,” the analysts stated.
They added that the company’s solid product revenues “suggest that firewall demand remains healthy,” and while billings growth topped consensus expectations, they believe it will take time for Check Point to achieve double-digit billings growth.
“We continue to believe that CHKP’s operating income growth is important, and we are more positive on CHKP’s FY23 operating margin potential given some supply chain relief and FX help.”
