Merrill Lynch expects solid quarter from Check Point
"The expanding portfolio, deep franchise, and focus on security provide the basis for continued appreciation in the stock"
Globes correspondent 14 Apr 05 15:28
Merrill Lynch finds shares of Check Point (Nasdaq: CHKP) attractive, and believes the company will meet or beat its estimates for the first quarter of this year. Merrill Lynch analyst Edward Maguire projects EPS of $0.29 on revenue of $139 million for the network security company. Check Point's own guidance is for EPS of $0.28-0.29 on revenue of $137-140 million.
Given recent weakness in security software valuations, we believe the shares remain attractive ahead of a possible 2H05 sector rebound. We continue to recommend Check Point as we believe the expanding portfolio, deep franchise and focus on security provide the basis for continued appreciation in the stock," Maguire writes.
"While seasonality could present a headwind, we remain comfortable with our current estimates. We believe the best chance for upside to our numbers comes from Zone Labs and Integrity, as well as continued strong renewals and subscriptions. We also believe Express remains strong, as do certain low/midrange Nokia appliances.
"Looking ahead, we believe Check Point is off to a good start to 2Q05. A recent Check Point product seminar drew the best attendance by channel partners in several years according to our sources. We continue to recommend Check Point as we believe the company’s expanding portfolio, deep franchise and focus on security provide the basis for continued appreciation in the stock.
"Current June consensus is revenues of $144 million and $0.30 versus our estimate of $145 million and $0.28.We think management could guide earnings in line with expectations for the quarter and maintain the prior outlook for the year."
Check Point shares closed at $23.30 yesterday, giving the company a market cap of $5.78 billion. It is due to release its first quarter results on April 18.
Published by Globes [online], Israel business news - www.globes.co.il - on April 14, 2005
Midas
