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Is Check Point Software Technologies Ltd. (CHKP) Stock Over or Undervalued?

Friday, October 29, 2021 10:21 AM | InvestorsObserver Analysts
Is Check Point Software Technologies Ltd. (CHKP) Stock Over or Undervalued?

Check Point Software Technologies Ltd. (CHKP) receives a weak valuation ranking of 39 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. CHKP has a better value than 39% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

Valuation Rank - 39
CHKP gets a 39 Valuation Rank today. Find out what this means to you and get the rest of the rankings on CHKP!

Metrics Analysis

CHKP has a trailing twelve month Price to Earnings (PE) ratio of 19.5. The historical average of roughly 15 shows a average value for CHKP stock as investors are paying fair share prices relative to the company's earnings. CHKP's average trailing PE ratio shows that the firm has been trading around its fair market value recently. Its trailing 12-month earnings per share (EPS) of 6.10 justifies the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. CHKP currently has a 12-month-forward-PE-to-Growth (PEG) ratio of 2.72. The market is currently overvaluing CHKP in relation to its projected growth due to the PEG ratio being above the fair market value of 1. CHKP's PEG comes from its forward price to earnings ratio being divided by its growth rate. Because PEG ratios include more fundamentals of a company's overall health with additional focus on the future, they are one of the most used valuation metrics by analysts.

Summary

CHKP' has a weak valuation at its current share price on account of a overvalued PEG ratio due to strong growth. CHKP's PE and PEG are worse than the market average leading to a below average valuation score. Click Here to get the full Report on Check Point Software Technologies Ltd. (CHKP) stock.

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