CHKP: Could Trip Over Something Positive - Upgrading to Buy

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CHKP: Could Trip Over Something Positive - Upgrading to Buy

July 1, 2026

John DiFucci john.difucci@guggenheimpartners.com CHKP: Could Trip Over Something Positive -

212 518 9670 Upgrading to Buy

Lawrence Vensko

lawrence.vensko@guggenheimpartners.com

212 518 9548 Key Message: We are upgrading Check Point shares to Buy from Neutral and

introducing a DCF-based price target of $188, implying 43% upside from current prices.

Fundamentally, we believe CHKP shares are trading materially below the intrinsic

value of its recurring revenue if it were run hyper efficiently, in addition to its single

digit FCF multiple. We believe Check Point is taking the necessary steps to achieveCHKP BUY its aspiration of double-digit top line growth, but this upgrade is not dependent on

Check Point Software Technologies Ltd. that. At current prices, CHKP shares trade at 4.3x EV/NTM Recurring Revenue and 8.0x

Sector: Software EV/NTM FCF, which is a discount to a group of security peers that trade at 11.6x Recurring

Revenue and 35x FCF. We believe there is a reason the stock trades at these levels as Rating Change the company reported a disappointing 1Q following a GTM transition that the company

Share Price $131.43 expects will impact 2Q results as well, in addition to being a single-digit grower for some

Price Target $188.00 time. That said, we believe the bad news is already in the stock at these levels,

Prior NA which presents an interesting buying opportunity for investors. Lastly, Check Point

announced a $2B expansion of its share repurchase authorization on May 11, which we

believe implies that the company will continue to be opportunistic with share repurchases,

Revenue ($M) especially if shares remain at these levels.

(FY DEC) 1Q 2Q 3Q 4Q FY

2025 637.8 665.2 677.5 744.9 2,725.4