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Technology Stocks : Check Point Software (CHKP)
CHKP 183.81-1.0%Nov 20 3:59 PM EST
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To: c. carlson who wrote (6556)3/11/2002 1:30:44 PM
From: JSwanson  Read Replies (3) of 7150
 
I am new to CHKP and I am trying to figure out if this company is worth owning at recent prices. Your posts seem to be very balanced and I am therefore interested in you opinion.

It seems to me that CHKP will have an extremely difficult time maintaining the growth it has achieved in the past going forward.

The company owns the software Firewall/VPN market which has historically targeted the large corporate market. Everything I read suggests that this market is saturated and that the growth will come from the Small/Medium sized businesses and this market usually opts for an appliance solution which is dominated by players (in the small/med mkt) like SonicWall, NetScreen, WatchGuard, etc. Furthermore, others are pushing into this space and the result is almost certainly a decline in margins for all as the competitive pressure increases. Even CHKP is guiding margin expectations down by a material level.

Based on these facts it seems to me that the company is clearly not a bargain at these prices but *MAY* be fairly to slightly overvalued at these recent prices.

I am aware of the S-box appliance but have read that there has only been a luke-warm response to this product.

Are there markets that I am missing? What is your take on the attractiveness of this stock?

Thanks in advance.

JS
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