Those looking to invest in the thriving cyber security industry would do well to check out CheckPoint (CHKP). Whilst cyber security spending is experiencing strong growth following recent ransomware attacks, many of the stocks such as FireEye and Palo Alto are priced on lofty valuations despite being unprofitable and likely to remain so for many years as they pay between 20-25% of revenues in stock based compensation.
CheckPoint in contrast is priced on a TTM PE of 25 and forward PE of 19.8 with historic and forecast growth of around 8%-10%. Stock based compensation in contrast to peers is only about 5% of revenue.
CheckPoint offers market leading products that have been well received by market research and consultants and have won industry awards from Gartner Magic Quadrant and Miercom’s Certified Secure Award. More recently, the launch last quarter of Check Point Infinity has been well received and provides consolidated protection across networks, cloud and mobile.
Admittedly, CheckPoint’s growth is slower than some of the competition and it is quite possible it will be overtaken by Palo Alto. But with consistent demonstrated profitability over many years and a fraction of the dilution it looks like a better stock. Add in that Checkpoint has $1.6bn of cash and equivalents with no debt while both FireEye and PANW have a chunk of debt weighing them down.
This is not a recommendation to buy or sell. Stocks are not suitable for all investors. Please do your own research.
Submitted September 09, 2017 at 09:16AM by InterestingNews1 http://ift.tt/2jdQlsE
