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Investing.com - Scotiabank (TSX:BNS) lowered its price target on Checkpoint Software (NASDAQ:CHKP) to $220.00 from $240.00 on Thursday, while maintaining a Sector Outperform rating on the cybersecurity firm. According to InvestingPro data, the stock has experienced a significant 15.9% decline over the past week, with shares currently trading at $186.67.
The price target reduction follows what Scotiabank described as a "somewhat disappointing hiccup" in Checkpoint’s second quarter 2025 results, with billings and RPO (Revenue Performance Obligations) growth decelerating quarter-over-quarter. Despite recent challenges, InvestingPro analysis shows the company maintains impressive gross profit margins of 88.3% and holds more cash than debt on its balance sheet.
According to Scotiabank, management attributed the slowdown to an unusually large value of slipped deals in Q2, which impacted billings growth by approximately 3 percentage points. Despite this setback, Checkpoint has reiterated its full-year guidance.
Scotiabank noted that Checkpoint stock had performed well year-to-date, but some investors may question how shares can move higher if the company is already halfway through the hardware refresh cycle, as indicated by management.
The firm maintained its positive outlook on Checkpoint citing four key factors: the company’s defensive nature and sticky customer base, its top-tier operating margin profile of approximately 42%, a 6% gross repurchase yield, and reasonable valuation at roughly 16 times 2026 EBITDA. The company’s aggressive share buyback program and strong profitability metrics continue to support its investment case, with current EV/EBITDA standing at 18.5x.
In other recent news, Check Point Software reported its second-quarter 2025 results, surpassing FactSet consensus estimates with a 6% rise in revenue. The growth was attributed to strong demand for its emerging technologies portfolio and Quantum Force appliances. Despite this positive revenue performance, analysts have adjusted their price targets for Check Point Software. Cantor Fitzgerald lowered its target to $220, maintaining a Neutral rating, citing the company’s solid product demand. Stifel also reduced its price target to $200, describing the quarter as "mixed/noisy," with some metrics exceeding expectations while others fell short. Mizuho (NYSE:MFG) cut its target to $215, noting a shortfall in billings growth, which reached $642 million, below the Street’s expectation of $649 million. However, Mizuho mentioned that several large deals, initially delayed, have since closed. These developments reflect the varied analyst perspectives following the company’s financial performance.
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