Value
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.4 |
| P/S | 7.1 |
| EV/EBITDA | 3.5 |
| Fwd P/E | 9.2 |
| PEG | 6.2 |
| Analyst target | 6.0 |
- ▸Forward P/E: 10.9x
- ▸PEG: 1.19
CHKP · Why this verdict
Why Check Point Software Technologi (CHKP) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Check Point Software combines four consecutive quarters of beating analyst estimates — averaging 22% upside to consensus — with premier financial quality in 38% operating margins and a perfect Piotroski F-score, but a confirmed death-cross downtrend and failed momentum gate mean the risk/reward favors patience until price conditions improve.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 10.8 times and a PEG ratio of 1.18, the stock offers a meaningful discount to the broader software peer group, providing a valuation floor that limits downside even if near-term growth remains muted. Valuation breakdown | The forward P/E multiple remains below 15 times while earnings estimates continue to hold or rise, preserving the value-entry case. | →Stable |
| CounterWeak near-term growth limits the catalyst for multiple re-rating; a stock can screen inexpensive and remain so indefinitely if price momentum is absent and institutional interest has not returned. | ||
The business generates 38% operating margins, earns a Piotroski F-score of 9 out of 9, and delivers a 38% return on equity — a combination that places it among the highest-quality franchises in the infrastructure-software peer group. Quality breakdown | Operating margins remain above 35% and the Piotroski F-score stays at 8 or above over the next four quarters. | →Stable |
| CounterFree cash flow conversion relative to net income sits at 69% — a level flagged as a concern — suggesting roughly a third of reported earnings is not translating into cash, which could erode the quality profile if the gap widens. | ||
The company has beaten analyst estimates in each of the last four consecutive quarters, with the average quarterly surprise running at roughly 22% — a pattern consistent with management consistently under-promising and over-delivering. Earnings | Average quarterly EPS surprise remains above 10% and no miss is recorded over the next four quarters. | →Stable |
| CounterThe most recent quarter posted only a 4% positive surprise, the narrowest of the streak; as analyst models tighten around a track record of outperformance, the runway for large beats narrows and execution risk rises. | ||
The stock is in a confirmed downtrend: it trades below its 200-day moving average, which is itself declining at roughly 6% per month, and a death cross has formed — technical conditions that have historically weighed on forward returns until reversed by a fundamental catalyst. Momentum breakdown | This pillar is falsified if the 200-day moving average slope turns positive and price reclaims that average on sustained volume. | →Stable |
| CounterWith RSI near 39 and the stock approaching oversold territory, a single strong earnings catalyst — such as the outsized beats seen earlier in this streak — could trigger a rapid technical reversal. | ||
At a forward P/E of 10.8 times and a PEG ratio of 1.18, the stock offers a meaningful discount to the broader software peer group, providing a valuation floor that limits downside even if near-term growth remains muted.
→StableValuation breakdown
- Expectation
- The forward P/E multiple remains below 15 times while earnings estimates continue to hold or rise, preserving the value-entry case.
CounterWeak near-term growth limits the catalyst for multiple re-rating; a stock can screen inexpensive and remain so indefinitely if price momentum is absent and institutional interest has not returned.
The business generates 38% operating margins, earns a Piotroski F-score of 9 out of 9, and delivers a 38% return on equity — a combination that places it among the highest-quality franchises in the infrastructure-software peer group.
→StableQuality breakdown
- Expectation
- Operating margins remain above 35% and the Piotroski F-score stays at 8 or above over the next four quarters.
CounterFree cash flow conversion relative to net income sits at 69% — a level flagged as a concern — suggesting roughly a third of reported earnings is not translating into cash, which could erode the quality profile if the gap widens.
The company has beaten analyst estimates in each of the last four consecutive quarters, with the average quarterly surprise running at roughly 22% — a pattern consistent with management consistently under-promising and over-delivering.
→StableEarnings
- Expectation
- Average quarterly EPS surprise remains above 10% and no miss is recorded over the next four quarters.
CounterThe most recent quarter posted only a 4% positive surprise, the narrowest of the streak; as analyst models tighten around a track record of outperformance, the runway for large beats narrows and execution risk rises.
The stock is in a confirmed downtrend: it trades below its 200-day moving average, which is itself declining at roughly 6% per month, and a death cross has formed — technical conditions that have historically weighed on forward returns until reversed by a fundamental catalyst.
→StableMomentum breakdown
- Expectation
- This pillar is falsified if the 200-day moving average slope turns positive and price reclaims that average on sustained volume.
CounterWith RSI near 39 and the stock approaching oversold territory, a single strong earnings catalyst — such as the outsized beats seen earlier in this streak — could trigger a rapid technical reversal.
Per-dimension breakdown
Quality
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.2 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.6 |
| FCF quality | 5.3 |
| Moat | 7.1 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Excellent ROE: 38%
- ▸Strong margins: 38%
- ▸Earnings quality warning: 69% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
3.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 3.2 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Capitulation risk (RSI 24, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.3%/30d — confirmed downtrend
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.3 |
| erm sentiment | 4.5 |
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.0 |
- ▸Modest insider selling — $9,647,320 (0.074% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.5 |
| quality rank | 9.1 |
| growth rank | 1.1 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.8 |
| support resistance | 7.4 |
| 52w position | 0.6 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 8.9 |
| volatility | 3.3 |
| put call | 9.7 |
| implied vol | 5.1 |
| max pain risk | 7.0 |
| beta | 10.0 |
| debt equity | 6.8 |
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Mixed signals. Hold existing position.
Engine technical detail
verdict_path:
L4:PATH_F_HOLD_DEFAULTPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.8<4.5
- ASYMMETRY:1.0<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
1.00
Upside
+7.4%
Downside
7.4%
Sizing output
AVOID
SetupFALLING_KNIFE — Death cross, below all MAs, RSI 24, MACD bearish
EdgeTEMP_HEADWIND — High quality (8.0) with weak momentum (2.8)
SuitabilityMODERATE — Balanced profile
Investment implication
The default F-path HOLD fired without any positive-conviction gate triggering — no momentum acceleration, no quality+value crossover, no setup recognition. Highest-clear gate: INSIDER:OK. Top dim: Quality at 8.0; weakest: Momentum at 2.8. The engine's read is one of pattern absence — no directional conviction in either direction at current asymmetry.
The strongest dimensions are Quality at 8.0, Catalyst at 7.5, and Risk (lower is worse) at 7.2; the weakest are Momentum at 2.8, Growth at 3.5, and Insider at 3.8. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 1.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The company has beaten analyst estimates in each of the last four consecutive quarters, with the average quarterly surprise running at roughly 22% — a pattern consistent with management consistently under-promising and over-delivering.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2The business generates 38% operating margins, earns a Piotroski F-score of 9 out of 9, and delivers a 38% return on equity — a combination that places it among the highest-quality franchises in the infrastructure-software peer group.
Trip ifFree cash flow as a percentage of net income falls below 50% for 2 consecutive quarters.
- P3The stock is in a confirmed downtrend: it trades below its 200-day moving average, which is itself declining at roughly 6% per month, and a death cross has formed — technical conditions that have historically weighed on forward returns until reversed by a fundamental catalyst.
Trip if200-day moving average slope rises above 0% for 30 consecutive days.
- P4At a forward P/E of 10.8 times and a PEG ratio of 1.18, the stock offers a meaningful discount to the broader software peer group, providing a valuation floor that limits downside even if near-term growth remains muted.
Trip ifForward P/E multiple expands above 18 times for 2 consecutive quarters.