Why Check Point Software Stock Dived by Almost 15% Today

Key Points

• The cybersecurity company posted growth on both the top and bottom lines in its second quarter.

• It also notched a double beat on analyst estimates, but investors were focused on other, less happy news.

• 10 stocks we like better than Check Point Software Technologies ›

Wednesday was an eventful day for Check Point Software Technologies (NASDAQ: CHKP). The company published its latest quarterly earnings report, but this was overshadowed by a big-ticket buyout of a peer company in its native Israel.

The latter was dismaying for Check Point investors, and many sold out of the stock. It ended up closing nearly 15% lower in price, for a much steeper tumble than the S&P 500 index's 0.1% slip.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

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 Palo Alto Networks' news that it is acquiring Israeli peer CyberArk Software for 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.

Should you invest $1,000 in Check Point Software Technologies right now?

Before you buy stock in Check Point Software Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Check Point Software Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,075,791!*

Now, it’s worth noting Stock Advisor’s total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Check Point Software Technologies. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.