Analyst Todd Raker says second quarter earnings per share and revenues beat estimates. He raised his $429.6 million 2002 revenue estimate to $433.2 million, and upped the $0.97 EPS estimate to $1.01, even though the company cut its revenue estimate a bit, Check Point kept its EPS estimate steady through 2002.
For 2003, the company sees $1.11 EPS on $502 million revenue. Raker views the second quarter as solid performance in a difficult environment. However, Check Point continues to struggle with the sustainability of its operating model. He notes operating margin was 59% in the second quarter; he thinks operating margin above 55% is not sustainable.
Raker maintains his hold rating until he sees evidence that Check Point's competitive share loss has stabilized. He thinks the stock's risk/reward is fairly balanced.