Reviewing Check Point Software Technologies (NASDAQ:CHKP) and InterDigital (NASDAQ:IDCC)

Check Point Software Technologies (NASDAQ:CHKP) and InterDigital (NASDAQ:IDCC) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Risk & Volatility

Check Point Software Technologies has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, InterDigital has a beta of 1.5, meaning that its stock price is 50% more volatile than the S&P 500.

Profitability

This table compares Check Point Software Technologies and InterDigital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Check Point Software Technologies	31.74%	34.08%	12.43%
InterDigital	38.53%	28.34%	15.55%

Valuation & Earnings

This table compares Check Point Software Technologies and InterDigital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Check Point Software Technologies	$2.73 billion	5.51	$1.06 billion	$8.31	17.71
InterDigital	$834.02 million	8.91	$406.64 million	$9.08	31.79

Check Point Software Technologies has higher revenue and earnings than InterDigital. Check Point Software Technologies is trading at a lower price-to-earnings ratio than InterDigital, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

98.5% of Check Point Software Technologies shares are held by institutional investors. Comparatively, 99.8% of InterDigital shares are held by institutional investors. 29.0% of Check Point Software Technologies shares are held by company insiders. Comparatively, 3.5% of InterDigital shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Check Point Software Technologies and InterDigital, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Check Point Software Technologies	0	20	10	0	2.33
InterDigital	0	2	2	0	2.50

Check Point Software Technologies currently has a consensus price target of $151.32, suggesting a potential upside of 2.81%. InterDigital has a consensus price target of $425.00, suggesting a potential upside of 47.25%. Given InterDigital’s stronger consensus rating and higher possible upside, analysts plainly believe InterDigital is more favorable than Check Point Software Technologies.

Summary

InterDigital beats Check Point Software Technologies on 9 of the 14 factors compared between the two stocks.

About Check Point Software Technologies

Check Point Software Technologies is a cybersecurity company that develops products and services to protect organizations’ networks, cloud environments, devices, and users. Its offerings include network security appliances and software, cloud security tools, endpoint and workspace protection, and centralized security management. The company’s product families include Quantum for network security, CloudGuard for cloud security, and Harmony for user and endpoint protection. Check Point also provides threat prevention, security research, and related support services to businesses and other organizations around the world.

About InterDigital

InterDigital, Inc. is a technology research and development company whose work focuses on wireless communications, video and related digital technologies. Rather than selling consumer devices, the company develops technology and licenses its intellectual property to companies that make and use connected products and services. Its research spans cellular communications, including technologies used in 4G and 5G networks, as well as Wi-Fi, video compression and other areas. InterDigital holds patents covering technologies incorporated into industry standards and licenses its portfolio to companies around the world.