In a report published Wednesday, JMP Securities analyst Erik Suppiger initiated coverage of Check Point Software Technologies Ltd. (NASDAQ: CHKP) with a Market Perform rating.
"[W]e believe the company will benefit from the growing demand for cybersecurity solutions; however, we are concerned that increasing competition in the firewall market may limit new customer growth," Suppiger stated.
Check Point is the biggest pure play vendor of security solutions, and the analyst believes that the company is well positioned to benefit from robust growth in the security market, expected over the next few years. The company has the largest share of the enterprise firewall market, at about 22 percent, along with differentiated technology and a renowned brand name.
On the other hand, this is also a market that is intensely competitive, with some vendors meaningfully outperforming the market growth rates with their innovative products and next-gen architecture.
"As a result, we are concerned that Check Point will have difficulty expanding into new accounts as emerging firewall vendors continue to gain a stronger foothold in the market," the JMP Securities report said.
The analyst believes that the stock is fairly valued at present.
Latest Ratings for CHKP
| Jul 2015 | JMP Securities | Initiates Coverage on | Market Perform | |
| Jun 2015 | Barclays | Initiates Coverage on | Equal-weight | |
| Jun 2015 | Wunderlich | Initiates Coverage on | Buy |
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