Cybersecurity Stock Climbs on Earnings Beat

The work-from-home environment boosted profits

Deputy Editor
Apr 26, 2021 at 10:24 AM
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The shares of Check Point Software Technologies Ltd (NASDAQ:CHKP) are up 1.4% at $121.49 at last check, after the cybersecurity company announced better-than-expected first-quarter earnings of $1.54 per share, as well as revenue above estimates. The work-from-home economy lifted demand for Check Point's services, and CEO Gil Shwed noted that "the cyber threat landscape is reaching new levels of risk and requires a holistic security architecture to prevent the next cyber pandemic."

On the charts, today's positive price action is running out of steam at the $121 level, where CHKP's 200-day moving average also resides. Year-to-date, the equity is down 8.7%, but remains comfortably distant from its May 14 annual low of $101.27.

Analysts are overwhelmingly bearish on Check Point stock, with only three of the 20 in coverage carrying a "strong buy," while the remaining 17 sport a "hold" or worse. Meanwhile, the 12-month consensus price target of $131.43 is around an 8% premium to current levels. 

There is plenty of short interest to be unwound as well. Though shorts have been jumping ship, these bearish bets account for 7.7% of the stock's available float. In other words, it would take over six days to cover at CHKP's average pace of trading.  

 

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