Check Point Software Technologies Ltd. (CHKP) Boosts Earnings and Increases Share Buybacks with Strong Free Cash Flow

Sound Shore Management, an investment management firm, has released its investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The fund’s Investor Class (SSHFX) and Institutional Class (SSHVX) declined 1.93% and 1.89% respectively, in the first quarter of 2025 compared to a 2.14% return for the Russell 1000 Value Index (Russell Value) and -4.27% return for the Standard & Poor 500 Index (S&P 500). Sound Shore’s 35-year annualized returns were 10.13% and 10.41% for SSHFX and SSHVX, respectively, as of March 31, 2025, and were ahead of the Russell Value at 9.81% and trailed the S&P 500 at 10.56%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Sound Shore Management highlighted stocks such as Check Point Software Technologies Ltd. (NASDAQ:CHKP). Check Point Software Technologies Ltd. (NASDAQ:CHKP) develops and supports a range of products and services for IT security. The one-month return of Check Point Software Technologies Ltd. (NASDAQ:CHKP) was 10.32%, and its shares gained 47.56% of their value over the last 52 weeks. On May 23, 2025, Check Point Software Technologies Ltd. (NASDAQ:CHKP) stock closed at $227.86 per share with a market capitalization of $24.69 billion.

Sound Shore Management stated the following regarding Check Point Software Technologies Ltd. (NASDAQ:CHKP) in its Q1 2025 investor letter:

"Even within the uncertain market environment, we were encouraged by stability throughout our portfolio. Check Point Software Technologies Ltd. (NASDAQ:CHKP), an information technology security provider, was our top contributor for the period. A leader in what has become a critical focus for businesses, cyber security solutions, Check Point gained after announcing improved bookings and a positive revenue outlook for 2025. We added the position to the portfolio early in 2024 when it was trading at a below normal 17 times earnings. The company is growing earnings and buying back shares with its free cash flow."

Check Point Software Technologies Ltd. (NASDAQ:CHKP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held Check Point Software Technologies Ltd. (NASDAQ:CHKP) at the end of the first quarter which was 40 in the previous quarter. Check Point Software Technologies Ltd.'s (NASDAQ:CHKP) first quarter revenue increased 7% to $638 million. While we acknowledge the potential of Check Point Software Technologies Ltd. (NASDAQ:CHKP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Check Point Software Technologies Ltd. (NASDAQ:CHKP) and shared the list of best performing cybersecurity stocks so far in 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.