Check Point shares surge on new CEO, earnings, becomes Israel’s most valuable company
Check Point shares surge on new CEO, earnings, becomes Israel’s most valuable company
The veteran cybersecurity company took its market cap above $20 billion, while both Teva and Mobileye shares dropped.
Check Point has regained its position as Israel’s most valuable company after its shares surged on Wednesday following the news of Nadav Zafrir’s appointment as its next CEO and the announcement of its second quarter earnings.
At the time of writing, Check Point shares were up around 8%, giving the company a market cap of over $20.5 billion. The next Israeli companies on the list are Teva ($18.8B) and Mobileye ($18B).
Check Point announced earlier Wednesday that Zafrir will replace Gil Shwed as CEO. Zafrir, who founded the venture capital fund Team8 ten years ago, is considered an expert in the field of cyber and serves as chairman of 17 companies in the industry. Before that, he served 25 years in the IDF, including as the commander of Unit 8200 between 2009 and 2013.
Zafrir will take up his post in December 2024 and will also be added to Check Point's board of directors. Shwed, who founded the company thirty years ago and has managed it since, will transition to the position of Executive Chairman.
Shwed announced in February that he is stepping down from his role as CEO. The 55-year-old Shwed co-founded the cybersecurity giant in 1993 alongside Shlomo Kramer and Marius Nacht, who left the company long ago. Despite being the youngest founder, Shwed has been at the helm of Check Point since its inception and is now the longest-tenured CEO on Nasdaq.
The announcement of Zafrir's appointment came at the same time Check Point released its financial results for the second quarter of 2024. The company reported revenues of $627 million, reflecting a 7% increase compared to the same quarter last year and falling within the middle of the forecast range. Earnings per share rose by 8% to $2.17. For the first time, revenue from software subscriptions exceeded $270 million, marking an increase of more than 10%. Operating expenses also grew by 10%, due to both new hiring and costs associated with the acquisition of Perimeter 81, completed a year ago for $500 million.
Cash balances currently stand at $3.1 billion, with cash flow rising slightly to $200 million in the second quarter. Ten days ago, Check Point significantly expanded its stock buyback program by $2 billion. In the past quarter, the company repurchased $325 million worth of shares. Since the buyback program began, Check Point has invested a total of $15 billion in purchasing 218 million shares, leading to a substantial reduction in the share count over the years. According to Check Point, investors favor this policy over dividend distribution, as it similarly benefits earnings per share.
