5 July 12 17:20–Over the twenty years that have passed since the Internet became part of our lives, protection of access to it has become more and more sophisticated, as have the threats. Furthermore, the space that the means of protection are trying to shelter has changed. Until not long ago, the enterprise network and endpoints (usually a PC, or any device that serves the end-user) were all that we had to worry about, but today they are only part of the whole. The intensity of the time we spend on the web, the switch to mobile devices such as iPhones and iPads, the growing amount of critical information in digital format, and new computing platforms these are just some of the trends generating constant demand for new information security solutions.
Israeli company Check Point Software Technologies Ltd. (Nasdaq: CHKP), which has become one of the leaders of the security market, is well aware of these changes. Over the years, the company has changed its approach to the market and the products it sells, and it seemed as though the investment community was happy about that. In the past two years, its share price rose 68%, and the company reached a peak market cap of $13.4 billion in April this year. Then something went wrong. Since the release of the company’s first quarter results, the company has lost about a quarter of its value, falling to a market cap of $10.2 billion.
Check Point has always been a company to provide pleasant surprises, quarter after quarter, but in the first quarter of this year almost the opposite happened. The company disappointed, both with its results and with its guidance. It posted year-on-year growth of just 4.7% in sales of products and licenses, compared with double-digit growth in the corresponding quarter. Its revenue guidance for the second quarter was for 8-11% growth, at the lower end of Wall Street expectations. The results and guidance raised old-new questionings about the company’s conduct in the changing security market, questionings that apparently found expression in the share price…Read More>>