Head-To-Head Analysis: Check Point Software Technologies (NASDAQ:CHKP) & Palo Alto Networks (NASDAQ:PANW)

Palo Alto Networks (NASDAQ:PANW) and Check Point Software Technologies (NASDAQ:CHKP) are both large-cap computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Insider and Institutional Ownership

79.8% of Palo Alto Networks shares are held by institutional investors. Comparatively, 98.5% of Check Point Software Technologies shares are held by institutional investors. 2.5% of Palo Alto Networks shares are held by company insiders. Comparatively, 29.0% of Check Point Software Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Palo Alto Networks and Check Point Software Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Palo Alto Networks	2	13	27	0	2.60
Check Point Software Technologies	0	16	11	1	2.46

Palo Alto Networks currently has a consensus price target of $208.00, indicating a potential upside of 5.60%. Check Point Software Technologies has a consensus price target of $232.44, indicating a potential upside of 5.95%. Given Check Point Software Technologies’ higher possible upside, analysts plainly believe Check Point Software Technologies is more favorable than Palo Alto Networks.

Risk and Volatility

Palo Alto Networks has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Check Point Software Technologies has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Profitability

This table compares Palo Alto Networks and Check Point Software Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Palo Alto Networks	13.95%	19.48%	5.77%
Check Point Software Technologies	32.75%	32.88%	16.43%

Valuation & Earnings

This table compares Palo Alto Networks and Check Point Software Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Palo Alto Networks	$8.03 billion	16.36	$2.58 billion	$1.75	112.55
Check Point Software Technologies	$2.57 billion	9.41	$845.70 million	$7.58	28.94

Palo Alto Networks has higher revenue and earnings than Check Point Software Technologies. Check Point Software Technologies is trading at a lower price-to-earnings ratio than Palo Alto Networks, indicating that it is currently the more affordable of the two stocks.

Summary

Check Point Software Technologies beats Palo Alto Networks on 8 of the 15 factors compared between the two stocks.

About Palo Alto Networks

Palo Alto Networks, Inc. provides cybersecurity solutions worldwide. The company offers firewall appliances and software; and Panorama, a security management solution for the global control of network security platform as a virtual or a physical appliance. It also provides subscription services covering the areas of threat prevention, malware and persistent threat, URL filtering, laptop and mobile device protection, DNS security, Internet of Things security, SaaS security API, and SaaS security inline, as well as threat intelligence, and data loss prevention. In addition, the company offers cloud security, secure access, security operations, and threat intelligence and security consulting; professional services, including architecture design and planning, implementation, configuration, and firewall migration; education services, such as certifications, as well as online and in-classroom training; and support services. It sells its products and services through its channel partners, as well as directly to medium to large enterprises, service providers, and government entities operating in various industries, including education, energy, financial services, government entities, healthcare, Internet and media, manufacturing, public sector, and telecommunications. Palo Alto Networks, Inc. was incorporated in 2005 and is headquartered in Santa Clara, California.

About Check Point Software Technologies

Check Point Software Technologies Ltd. develops, markets, and supports a range of products and services for IT security worldwide. The company offers a multilevel security architecture, cloud, network, mobile devices, endpoints information, and IOT solutions. It provides Check Point Infinity Architecture, a cyber security architecture that protects against fifth generation cyber-attacks across various networks, endpoint, cloud, workloads, Internet of Things, and mobile. In addition, the company offers security gateways and software platforms that support small and medium sized business. Further, it provides cloud network security, cloud native application protection, security and posture management, cloud identity and entitlement, cloud workload protection, cloud detection and response, and cloud web application protection for web applications and APIs; and Check Point Harmony that delivers endpoint and secure connectivity for remote user access. Additionally, the company offers technical customer support programs and plans; professional services in implementing, upgrading, and optimizing Check Point products comprising design planning and security implementation; and certification and educational training services on Check Point products. It sells its products through distributors, resellers, system integrators, original equipment manufacturers, and managed security service providers. Check Point Software Technologies Ltd. was incorporated in 1993 and is headquartered in Tel Aviv, Israel.