EarningsBeats Digest

Published: Mon, 02/01/21

EarningsBeats.com Digest for February 1, 2021

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Will CHKP Be A Harbinger For Other Cybersecurity Stocks?

I'll be watching Check Point Software's (CHKP) earnings report on Tuesday very closely. I love the way many cybersecurity firms are trading as we head into their quarterly earnings reports. CHKP isn't one of them, though, as the company has been badly lagging its software peers ($DJUSSW) and it's certainly underperformed many of the strongest cybersecurity firms. Why would I be interested then? Well, if lagging stocks in an industry can surprise to the upside, it could really set a bullish stage for others in the space when they get set to report:

CHKP is in an uptrend on an absolute basis, but it's definitely downtrending relative to software and the benchmark S&P 500 on a relative basis. We have seen volume accelerate in recent weeks as CHKP has moved higher, though, so it could deliver better-than-expected results. Last quarter, I watched as several internet companies blew away earnings estimates. I believe CHKP could provide the cybersecurity stocks a lift if they report a positive surprise.

Happy trading!

Tom Bowley, Chief Market Strategist

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