Check Point goes from safe stock to short sell

New York

CHECK Point Software Technologies Ltd's reputation among cybersecurity stocks rests on being a safe, if boring, investment. Now, short sellers are circling the world's top firewall provider in anticipation of a stumble. Bearish bets against Check Point made up 12.9 per cent of shares outstanding on Jan 14 after touching a record 13.5 per cent in December. The stock has tumbled 13 per cent in the past month, compared with a 10 per cent decline in the ISE Cyber Security ETF.

Check Point, which boasts the highest operating margin among 20 global peers, may not be the fastest growing, but it has been the most reliably profitable, according to FBR & Co. With rival Palo Alto Networks Inc forecast to report sales growth nearly five times faster than Check Point's and Cisco Systems Inc redoubling efforts to retake market share, the Israeli company may have to sacrifice profits or risk losing ground to competitors.