Check Point Software Technologies Ltd.
) is set to report third-quarter 2013 results on Oct 21. Last
quarter, the company posted in-line earnings. Let's see how
things are shaping up for this announcement.
Growth Factors This Past Quarter
Check Point delivered decent second-quarter results with the
bottom line matching the Zacks Consensus Estimate and the top
line surpassing the same. However, year-over-year comparisons
The year-over-year revenue growth was aided by an increase in
Software Updates, Maintenance and Services revenues, partially
offset by weak Product and Licenses revenues. However, lower
sales of high-end appliances impacted Product revenues.
Geographical contributions were good and growing acceptance of
Check Point's high-end products was encouraging. Despite
expectations of an increase in sales volume during the second
half, the company provided cautious third-quarter guidance,
reflecting macro uncertainty in the European region and capped
spending by customers.
We are positive on strong support from the acceptance of data
center appliances and believe that continuous enhancements in the
data center product lines will adequately support revenue growth
in the near term. However, an uncertain economic environment,
competitive pressures, currency headwinds and Check Point's
significant European exposure are the possible headwinds, going
Our proven model does not conclusively show that Check Point
will beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Zacks ESP: Both the Most Accurate estimate and the Zacks
Consensus Estimate stand at 78 cents. Hence, the difference is
Zacks Rank: Check Point's Zacks Rank #3 (Hold) when combined
with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that they have the right combination of elements to
post an earnings beat this quarter:
), with Earnings ESP of +1.99% and a Zacks Rank #1 (Strong
), with Earnings ESP of +1.49% and a Zacks Rank #1 (Strong
), with Earnings ESP of +2.29 and a Zacks Rank #2 (Buy).
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