Check Point Software Stock Plummets 15% Today—What Sparked the Sell-Off?
Check Point Software just took a nosedive worthy of a crypto crash—down 15% in a single session. No slow bleed here; this was a full-scale market panic. Here’s the breakdown.
The Trigger: Earnings or Excuses?
Wall Street’s tolerance for ‘revenue adjustments’ is thinner than a DeFi project’s whitepaper. Whether it was missed targets, weak guidance, or just a bad case of ‘macro headwinds,’ investors hit the eject button.
Security Sector Under Siege
Cybersecurity stocks aren’t exactly sleeping easy these days. With rivals like Palo Alto and CrowdStrike eating their lunch, Check Point’s ‘legacy tech’ vibe isn’t helping. Innovation moves fast—no one pays premium multiples for firewalls that smell like 2015.
The Bottom Line: Pain Without the Gain
Another reminder that in tech, you either disrupt or get disrupted. Meanwhile, hedge funds will shrug and short the next ‘safe’ stock—because nothing screams stability like double-digit single-day drops.
Growth where it counted
In a way, the market's punishment of Check Point was undeserved, because that report wasn't bad at all. The veteran cybersecurity company's second quarter saw it increase total revenue by 6% year-over-year to $665 million, accompanied by a 4% advance in "calculated" billings -- total revenue plus the change in deferred revenue -- to $642 million.
Image source: Getty Images.
Profitability improved too, with non-GAAP (adjusted) net income rising to slightly over $261 million ($2.37 per share) from the year-ago figure of $246 million.
Both headline results beat the average analyst's estimates, although not spectacularly. Collectively, those prognosticators were anticipating Check Point WOULD book slightly less than $662 million in revenue, and net an adjusted profit of $2.36 per share.
In the earnings release, Check Point attributed its growth to success in its emerging technologies offerings, a slate of products that includes enterprise risk tools among other offerings.
A big suitor is acquiring a rival
Management also reiterated its guidance for full-year 2025, which calls for revenue of $2.66 billion to $2.76 billion; this would mean growth of at least 4% over the previous year. Adjusted per-share earnings are forecast at $9.60 to $10.20, for an improvement ranging from 5% to 11%.
Again, none of these numbers is particularly discouraging. What investors were reacting more to was U.S. cybersecurity company' news that it is acquiring Israeli peerfor roughly $25 billion. That's a big chunk of change, and some investors were surely unhappy that Palo Alto chose CyberArk to be its bride instead of Check Point.
