Shares of cybersecurity leader Check Point Software (CHKP 2.76%) were up 7% as of noon ET on Tuesday, according to data provided by S&P Global Market Intelligence.
The firewall specialist grew revenue and earnings per share by 7% and 10%, easily surpassing analysts' expectations.
Adding further excitement to the results, Check Point saw billing and cash from operations grow even faster at 20% and 23%, respectively, causing the stock to pop today.
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Check Point Software: The forgotten firewall leader?
While Check Point Software may still be smaller and slower growing than its firewall peers, Fortinet and Palo Alto Networks, it has been a 52-bagger since its 1996 initial public offering.
NASDAQ: CHKP
Key Data Points
Similarly, though the company may not match the innovation heft of its massive peers, it remains a market leader in many firewall and security niches according to numerous technology research firms.
However, whereas Fortinet and Palo Alto Networks may offer more innovation upside, Check Point seems to be the more real-world-ready, Steady Eddie offering -- all at a lower cost.
As proven by its historical returns, this has proven to be a winning formula for the company. While it has spent to innovate just enough to maintain its leadership status (whether in-house or through acquisitions), Check Point has generously returned cash to shareholders through stock buybacks for over two decades.
Armed with a free cash flow (FCF) margin consistently above 40%, Check Point has eliminated over half of its outstanding shares since 2005, lowering its share count by 4% annually over that time.
Currently trading at a reasonable 20 times free cash flow (FCF) while delivering its steady revenue growth (and still buying back shares hand over fist), Check Point is a top-tier compounder that investors shouldn't forget about.
