Sourcefire confused Check Point guidance, says Lehman
31.1.06 | 10:43 By TheMarker
In a review of Check Point Software Technologies (NASDAQ: CHKP) after the data security company's fourth-quarter results, Lehman Brothers analyst Israel Hernandez blames a certain confusion on the company's acquisition of Sourcefire.
While some analysts complained that the company's results had been mixed, Hernandez called its fourth-quarter results "solid".
Part of the disappointment with the company's financials had been confusion caused by Sourcefire: some estimates included it while some did not, Hernandez suggested.
His bottom line is that Check Point stock is trading at 15 times estimated 2006 earnings per share of $1.43, and the company's cash position is worth $7 per share. He sees little potential fro a downside in the near term, he says, and potential upside in the coming six to 12 months.
Yesterday Comverse reported $156 million revenues for the fourth quarter of 2005, and 37 cents earnings per share.
Lehman Brothers had expected $158 million, a target that Check Point did not meet. But earnings beat its projection by a cool two cents per share.
For the first quarter of 2006, Check Point expects to achieve sales in the range of $145 million to $155 million, and to earn 32-34 cents per share.
Looking at the year 2006, the company guided investors to expect $661 million turnover, and earnings per share of $1.40 to $1.47. That includes revenues from Sourcefire, over which Check Point was rather vague - $20 million to $40 million.
Hernandez repeated an Overweight investment recommendation for the stock and a $30 12-month price target. http://www.haaretz.com/hasen/spages/676985.html