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No. of Recommendations: 2
As Check Point's value plummeted recently, I tried to find a reason why one of the few companies exhibiting strong growth in these difficult times could be valued at what would appear to be an insanely low multiple. I figured that the market had either gone completely mad or there was something fundamentally changing about the company. Although I didn't find any concrete evidence of a weakening in the company's competitive position, I did notice a disturbing trend in industry articles and analyst comments. From what I can gather, many in the industry believe that Checkpoint's dominance of the high growth VPN market may be coming to an end. This is not by any real fault of its own but simply because the market appears to be shifting. Whereas firewalls used to be the primary platform for VPNs, many now believe that the trend is moving away from this architecture. I decided to quickly run this by a “VPN guy” that I know and his initial reaction towards Check Point's technology didn't fill me with confidence. I didn't get any specific information from him (it was just a very brief conversation) so I'll have to drag some more info out of him when I get the chance. In the meantime, I was hoping to get some feedback from others on the board.

Any comments?

Matt
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