Check Point Software Technologies Inc (CHKP)

[midastouch017]

Merrill Lynch: Check Point could trade weakly on results

Analyst Edward Maguire maintains his "Buy" rating, and puts below-estimate revenue down to "seasonal headwind".

Globes correspondent 18 Apr 05 16:11

Merrill Lynch analyst Edward Maguire puts network security company Check Point's (Nasdaq: CHKP) slightly lower than expected first quarter revenue down to seasonal factors, and maintains his "Buy" recommendation.
"Check Point reported mixed 1Q05 results this morning as strong growth in subscriptions offset weaker than expected license sales. The softer than expected license line and decline in deferred revenues evidence a seasonal headwind, and we anticipate the stock could trade weakly on the news," Maguire writes.

"We remain buyers particularly on weakness. Given recent weakness in security software valuations, we think that the shares remain attractive and believe softer 1Q05 results imply a revenue distribution more skewed toward 2H05. 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.

"Expect outlook in line for the year, conservative for 2Q. 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 revenues slightly in line for the year but more conservatively for 2Q05. We are leaving estimates intact pending the company’s conference call."

Published by Globes [online], Israel business news - www.globes.co.il - on April 18, 2005

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