Check Point Software, one of the leading cybersecurity companies, hit an important technical benchmark Thursday. The Relative Strength (RS) Rating for Check Point stock rose into the 80-plus percentile with an upgrade to 81, up from 78 the day before.
Check Point Stock Passes A Milestone
The 81 RS Rating shows that Check Point stock is in the top 19% of all stocks for price performance this past year. Market history shows that the best-performing stocks often have an RS Rating north of 80 as they launch their biggest price moves.
Cybersecurity is top of mind for most companies these days, as cyberattacks escalate. Israel-based Check Point continues to trade near an all-time high set in March 2022. Recently it rose from a 125.68 low on Aug. 7 to above 136 Thursday afternoon.
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Among its other key ratings Check Point stock boasts a 93 Composite Rating, out of 99. The Composite is a combination of IBD's five other top ratings. The company also has a 92 Earnings Per Share Rating and an A SMR Rating (sales + profit margins + return on equity) on an A-to-E scale with A best and E worst.
Additionally, Check Point stock has a B+ Accumulation/Distribution Rating on an A+ to E scale. The B+ rating shows fairly heavy accumulation by big funds such as ETFs and mutual funds. That's bullish for Check Point because roughly 70% of all trades are by institutional investors.
Pretty Much All Upward Movement Since July
Check Point stock rose to an all-time high 149.62 on March 3, 2022. From there it consolidated in sync with the bear market last year. It broke out of a cup-with-handle pattern on May 2 this year and has risen steadily since then, including closing higher on 10 of the past 13 trading sessions. It hasn't formed a fresh base so now is not an ideal time to buy. See if it manages to form and break out of a proper base.
Earnings grew 22% last quarter to $2 per share on a mild 3% gain in revenue to $588.7 million. Its earnings growth has accelerated over the past four quarters from 7% to 9%, 15% and then 22%. However, sales growth decelerated from 8% to 7%, 4% and then 3%, a yellow flag to watch.
Check Point stock earns the No. 6 rank among its peers in the 34-company Computer Software-Security industry group. Palo Alto Networks and Qualys are among the group's highest-rated stocks.
As you try to find the best stocks to buy and watch, keep a close on eye on relative price strength.
IBD's proprietary Relative Strength Rating measures price action with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the trailing 52 weeks compares to all the other stocks in our database.
