...

Check Point Software Technologies Ltd. (CHKP) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Check Point Software Technologies Ltd. (CHKP)

View Full Profile →

Intrinsic Value (DCF)

Current$188.54
→
Intrinsic$168.84
-10%
$116.86$168.84$267.66
Market implies 11% growth for 5 years
CHKP appears fairly valued — current price aligns with our DCF estimate.
At $189, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $117 → Bull $268. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$199$217$236$257
10%$143$156$169$183
12%$112$122$131$142
14%$93$100$108$116

Bull Case

  • Bull case ($268) offers 42% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($117) implies 38% downside at 6% growth, 12% discount
  • Price reflects 11% growth expectations vs 8% historical — high bar to clear
Loading charts...

5-Year Free Cash Flow Projection

Year 1$1.11B
Year 2$1.20B
Year 3$1.30B
Year 4$1.40B
Year 5$1.51B
Terminal$22.23B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.03BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare CHKP vs AAPLStock Screener

Frequently Asked Questions

Is CHKP stock undervalued or overvalued?
🟡 FAIRLY VALUED

CHKP trades at $188.54, within 10% of our $168.84 intrinsic value estimate. At 10.0% WACC and 8.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $123.47 (bear) to $229.52 (bull).

What is CHKP's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.03B, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-476M net debt and dividing by 0.11B shares: Bear $123.47 | Base $168.84 | Bull $229.52. Current price $188.54 implies -9% to base case.

How is CHKP's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($18.67B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.