Check Point Software Technologies Ltd. (CHKP)
Quantitative Summary
DeterministicAt 13.9x earnings — a 79% discount to the sector average of 65.0x — CHKP is in the lower valuation range. Financial health is average: Piotroski 5/9, Altman Z 5.5. DCF fair value of $87 implies 38% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Check Point Software Technologies Ltd. present a dichotomy between exceptional quality metrics and subdued growth momentum. The company demonstrates robust capital efficiency with an ROIC-WACC spread of +4.5%, indicating value creation that exceeds the cost of capital, supported by industry-leading profitability margins where net income reaches 38.8% against gross revenue of 86.7%. Financial integrity is further reinforced by a strong Altman Z-Score of 5.5 and a low Beneish M-Score of -2.68, suggesting minimal earnings manipulation risk; however, the Piotroski F-Score of 5/9 reveals moderate stability in balance sheet strength or profitability trends relative to peers. Despite these quality attributes, revenue expansion remains constrained at 6.2% year-over-year, which limits the scalability typically associated with high-growth technology equities and prevents a higher DuPont ROE decomposition driven by asset turnover rather than margin leverage.
Valuation multiples reflect significant market divergence from historical norms and sector peers, creating a wide gap between current pricing and intrinsic value estimates. Trading at 14.1x forward earnings, the stock is priced approximately 64% below its five-year average multiple of 39.5x and trades substantially under the technology sector median of 58.2x. This compression aligns with a discounted cash flow model that assigns a fair value of $87 per share, implying current market prices incorporate pessimistic long-term free cash flow growth assumptions of only 9.3% over the next decade. The data suggests the market has heavily penalized recent performance relative to historical benchmarks, resulting in a significant discount that may not yet fully account for the underlying capital efficiency and margin durability observed in the fundamentals.
Risk-adjusted return metrics indicate underperformance on a factor basis despite the deep valuation discount. The stock exhibits an annual Fama-French alpha of -2.85%, signaling consistent failure to generate excess returns relative to its risk profile, while maintaining a neutral stance on both value (HML: -0.051) and profitability (RMW: 0.038) factors. This negative alpha suggests that the market pricing has not yet rewarded the company's high-quality earnings characteristics commensurately with its downside protection or growth potential, leaving investors to weigh whether the current multiple compression represents a temporary dislocation or a structural re-rating of expectations for future cash flow generation.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 6% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6.3% | 8.3% | 10.3% |
|---|---|---|---|
| 2% | $112 | $76 | $57 |
| 3% | $141 | $87 | $63 |
| 4% | $195 | $104 | $71 |
Center = base case. Green = >10% upside, Red = >10% downside vs $140.07.
Pre-computed DCF: WACC=8.3%, terminal growth 3%. Fair value $87 (-38.5%). Not investment advice.
Valuation Context
Currently trading 64% below its 5-year average P/E of 39.5x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedCheck Point Software Technologies Ltd. is currently trading at $127.28, a level that requires contextualization against its moving averages to determine the prevailing trend direction. Without specific average data points in this snapshot, the immediate assessment relies on observing whether recent price action sustains above or dips below these key benchmarks to define short-term support and resistance zones. The position relative to these lines serves as a primary indicator of market sentiment, with prices hovering consistently above suggesting bullish momentum, while breaches below might signal weakening trend strength. Complementing the moving average analysis, the Relative Strength Index provides insight into the velocity of recent price movements. If the RSI were elevated near overbought thresholds, it could indicate that buying pressure is intensifying but may also be approaching a point where consolidation or a pullback becomes probable. Conversely, lower readings would suggest diminished upward momentum and potential accumulation opportunities for cautious observers. The interplay between these two metrics offers a composite view of the stock's dynamic state, highlighting whether current price levels are supported by sustained trend strength or if short-term exhaustion is emerging within the technology sector context.
Quant Health Deep Dive
Profitability & Value Creation
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like HACK or SPDW, the fund manager is mechanically forced to buy or sell CHKP shares regardless of Check Point Software Technologies Ltd.'s individual fundamentals. We estimate $103M of passive capital is structurally linked to CHKP through 4 tracked ETFs. Passive flows have a limited but growing influence on CHKP's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 4 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Check Point Software Technologies Ltd. to visualize passive redemption contagion across ETFs and collateral stocks.
If Check Point Software Technologies Ltd. (CHKP) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies NVIDIA Corp. (NVDA) as the most exposed collateral stock, sharing 1 ETFs with CHKP. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 4 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
CHKP Ownership Dynamics
Passive funds hold 1 in every 156 CHKP shares, reducing daily market volatility.
Check Point Software Technologies Ltd. (CHKP) exerts measurable gravity on the passive index market, currently representing 4.4% of the Amplify Cybersecurity ETF (HACK) and 0.0% of the SPDW (SPDW). Across 4 tracked ETFs, approximately 1M shares (0.6% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest CHKP Exposure
Float lock-up computed from 4 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
CHKP Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Check Point Software Technologies Ltd. over the past year sits near $188.20 (15% of 252-day volume). The current price of $140.07 sits 25.6% below the POC — suggesting potential mean-reversion upside if institutional demand reasserts at this level. The highly concentrated volume profile (15% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
CHKP Capital Efficiency
How efficiently does Check Point Software Technologies Ltd. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Check Point Software Technologies Ltd. converts 113% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. The positive ROIC-WACC spread of 4.5% confirms that reinvested capital creates shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-13 | 36,022 | $116.34 | $4.2M |
| 2026-05-08 | 30,719 | $115.56 | $3.5M |
| 2026-04-29 | 2 | $139.29 | $278.58 |
| 2026-04-21 | 668 | $138.15 | $92,284.2 |
| 2026-04-16 | 499 | $134.69 | $67,210.31 |
| 2026-04-14 | 5,965 | $142.10 | $847,626.5 |
| 2026-04-13 | 15,846 | $135.22 | $2.1M |
| 2026-04-09 | 975 | $145.87 | $142,223.25 |
| 2026-04-08 | 1,120 | $148.40 | $166,208 |
| 2026-04-07 | 271 | $148.19 | $40,159.49 |
| 2026-04-01 | 718 | $142.85 | $102,566.3 |
| 2026-03-23 | 2,040 | $152.73 | $311,569.2 |
| 2026-03-19 | 371 | $153.16 | $56,822.36 |
| 2026-03-11 | 608 | $157.32 | $95,650.56 |
| 2026-02-25 | 894 | $152.44 | $136,281.36 |
| 2026-02-23 | 16,760 | $159.04 | $2.7M |
| 2026-02-20 | 214 | $159.05 | $34,036.7 |
| 2026-02-19 | 2,115 | $164.01 | $346,881.15 |
| 2026-02-18 | 4,042 | $165.02 | $667,010.84 |
| 2026-02-17 | 750 | $171.48 | $128,610 |
| 2026-02-13 | 721 | $164.47 | $118,582.87 |
| 2026-02-10 | 15 | $181.27 | $2,719.05 |
| 2026-02-06 | 6,072 | $176.25 | $1.1M |
| 2026-01-30 | 116,137 | $178.21 | $20.7M |
| 2026-01-29 | 3,673 | $180.24 | $662,021.52 |
| 2026-01-28 | 101,877 | $182.94 | $18.6M |
| 2026-01-27 | 4,007 | $184.71 | $740,132.97 |
| 2026-01-22 | 1,141 | $174.36 | $198,944.76 |
| 2026-01-20 | 15,383 | $185.54 | $2.9M |
| 2026-01-16 | 15 | $188.54 | $2,828.1 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| PANW | 0.527 | 0.542 | Moderate |
| GEN | 0.502 | 0.668 | Moderate |
| TENB | 0.486 | 0.568 | Moderate |
| ACN | 0.464 | 0.588 | Moderate |
| RDWR | 0.462 | 0.554 | Moderate |
| ADSK | 0.445 | 0.532 | Moderate |
| INTU | 0.442 | 0.569 | Moderate |
| ADP | 0.435 | 0.544 | Moderate |
| OKTA | 0.431 | 0.566 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare CHKP to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.