12 Most Undervalued Cybersecurity Stocks to Buy According to Hedge Funds

2) Check Point Software Technologies Ltd. (NASDAQ:CHKP)

Forward P/E as of November 20: ~17.6x

Number of Hedge Fund Holders: 32

Check Point Software Technologies Ltd. (NASDAQ:CHKP) is engaged in developing, designing, and marketing enterprise software. It provides threat prevention, web security, security management, and software-defined protection, among other services.

Check Point Software Technologies Ltd. (NASDAQ:CHKP) is cautiously optimistic about its growth trajectory, with an emphasis on network security, email security, and SASE solutions. Given its strong focus on product innovation and strategic acquisitions, Check Point Software Technologies Ltd. (NASDAQ:CHKP) appears to be well-placed to meet higher demand for cybersecurity solutions and maintain its growth momentum into the next fiscal year.

Experts believe that The Infinity platform offers a significant opportunity for Check Point Software Technologies Ltd. (NASDAQ:CHKP) to fuel growth and strengthen its market position. As a comprehensive security solution, Infinity addresses the increased demand for integrated, cloud-based security offerings that can protect organizations against multiple attack vectors. With more and more organizations embracing digital transformation, the demand for comprehensive security solutions, like Infinity, should grow.

The Infinity platform’s subscription-based model is expected to help Check Point Software Technologies Ltd. (NASDAQ:CHKP) pivot towards more predictable and recurring revenue streams. This can improve the company’s financial stability. When customers become deeply integrated with the Infinity ecosystem, there may be increased switching costs, which can improve customer retention.

Ariel Investments, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“Israeli based provider of products for information technology security, Check Point Software Technologies Ltd. (NASDAQ:CHKP) also advanced following solid quarterly earnings results. Double-digit billings growth was particularly strong across geographies. Consumers appear to be adopting more pillars of Check Point’s platform and engaging in larger strategic commitments with Infinity and Quantum Force. The company also announced the appointment of new CEO Nadav Zafrir, whose reputation is well established in the cyber community. Meanwhile, Check Point continues to be an astute steward of capital, pursuing organic growth and utilizing surplus cash to return capital to shareholders. We continue to favor the company’s exposure to the fast-growing cloud security market and its industry leading profitability.”