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GuruFocus has detected 5 Warning Signs with Check Point Software Technologies Ltd $CHKP.
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Check Point Software Technologies Ltd (NAS:CHKP)
Intrinsic Value: Projected FCF
$85.06 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Check Point Software Technologies Ltd's projected FCF intrinsic value is $85.06. The stock price of Check Point Software Technologies Ltd is $103.56. Therefore, Check Point Software Technologies Ltd's Price to Intrinsic Value: Projected FCF Ratio of today is 1.2.

CHKP' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 0.62   Max: 13.43
Current: 1.22

0.62
13.43

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Check Point Software Technologies Ltd was 13.43. The lowest was 0.62. And the median was 1.11.

CHKP's Price-to-Intrinsic-Value-Projected-FCF is ranked higher than
76% of the 865 Companies
in the Global Software - Application industry.

( Industry Median: 1.98 vs. CHKP: 1.22 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Check Point Software Technologies Ltd's FCF(6 year avg) is calculate as

Check Point Software Technologies Ltd Quarterly Data

201409201412201503201506201509201512201603201606201609201612
total_freecashflow 199206282190223234319197207176
201203201206201209201212201303201306201309201312201403201406
total_freecashflow 27315617919932920319356170166
201103201106201109201112
total_freecashflow 210174153200

Add all the Free Cash Flow together and divide 6 will get Check Point Software Technologies Ltd's FCF(6 year avg) = $815.32.

Check Point Software Technologies Ltd's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Dec16)*0.8)/Shares Outstanding
=(14.2639575377*815.316+3491.123*0.8)/169.557
=85.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Check Point Software Technologies Ltd's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=103.56/85.0600753955
=1.22

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Check Point Software Technologies Ltd Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Projected FCF 24.2630.8335.7141.5847.1455.0063.9470.5375.9485.06

Check Point Software Technologies Ltd Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Projected FCF 69.8170.5372.4872.2273.4575.9478.3178.4780.1485.06
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