With more business being done online, the chance of being affected by cyber crimes has gone up. That makes the need for cybersecurity companies high. Check Point Software Technologies (CHKP) and Fortinet (FTNT) are two such companies, but which is the better buy right now? Read more to find out.
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The field of cybersecurity is rapidly expanding, providing investors with a litany of money-making opportunities. Grand View Research reports that this industry is poised to expand at a 10.9% annual growth rate between 2021 and 2028, hitting a whopping $372 billion in aggregate value by 2028.
You can profit from the cybersecurity industry’s growth without making a career change to the digital security space. Take a look at the publicly traded companies in the cybersecurity industry, and you will find no shortage of investing options.
Below, we analyze two of the cybersecurity industry’s rising stars. Without further ado, let’s find out whether Check Point Software Technologies (CHKP) or Fortinet (FTNT) is more deserving of your investing dollars.
Check Point Software Technologies (CHKP)
Based in Tel Aviv, Israel, CHKP is a global IT security specialist. CHKP’s value offering includes software and hardware solutions for digital security. Connected to computers, virtual desktops, and operating systems, CHKP’s solutions are used by businesses throughout the world.
CHKP has an overall grade of B, which translates into a Buy rating in the POWR Ratings system. If investors take a close look at CHKP’s individual POWR Ratings components will find the stock has a Quality Grade of A and Value Grade of B. Click here to find out how CHKP grades in the rest of the components, including Growth, Momentum, Stability, and Sentiment.
Out of the 25 publicly traded companies in the Software – Security industry, CHKP is ranked in the top five, slotting in at fifth overall. You can find other top stocks in this industry by clicking here. Analysts expect CHKP to head higher. The average analyst target price for CHKP is $132.88. If the stock hits this price point, it will have popped by nearly 7%.
CHKP’s forward P/E ratio of 18.33, which indicates the stock is undervalued. Furthermore, the company is less volatile than the market, with a beta of 0.65.
FTNT provides network security solutions to governments, businesses, and other services providers. FTNT’s digital security products integrate across several security protection layers from virtual private networks (VPNs) to firewalls, wide area network acceleration, and more.
It is worth noting FTNT’s revenue partially stems from the metaphorical pot of gold that is subscription services. Investors gravitate toward subscription services stocks simply because a considerable percentage of clients are likely to establish subscriptions and allow recurring billing to continue indefinitely.
FTNT has a high forward P/E ratio of 82.70, which means the stock is very overvalued. The company has an overall grade of C and a Neutral rating in the POWR Ratings system. FTNT also has a Value Grade of D and a Growth Grade of C. You can find out the company grades in the rest of the components, including Momentum, Stability, Sentiment, and Quality, by clicking here.
Of the 25 stocks in the Software – Security industry, FTNT is ranked eighth. Analysts are bearish on FTNT, establishing an average target price of $290.12 for the stock. If FTNT drops to this level, it will have declined by slightly more than 9%.
Which is the Better Choice?
CHKP is the better choice between these two cybersecurity stocks as it has a better overall grade in the POWR Ratings. It also has better component grades and is ranked higher in the Software – Security industry.
CHKP shares were trading at $123.20 per share on Wednesday morning, up $0.41 (+0.33%). Year-to-date, CHKP has declined -7.31%, versus a 21.31% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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