Calls of Note Part 3

- Morgan Stanley notes that with its core business still under pressure, another acquisition with issues, and managerial turnover, they remain Underweight on Check Point (NASDAQ:CHKP). And all this sounds very familiar; deals lost in the enterprise in major existing accounts and US Government concerns impacting yet another acquisition likely pressures the stock in their view - just like 2 years ago. All in, it seems like deja vu all over again. A likely disappointing top line in 2007 from at least $10 million in lost PointSec sales along with execution issues will lead CHKP shares to underperform the markets, in their view, as these factors expose the consensus opinion for better growth as less than accurate. Firm recommends investors sell CHKP shares else, lest history repeat itself for the second (perhaps third?) time this decade.

Larger vendors have steadily gained share in large enterprise deals, including several additional Fortune 20 accounts we recently learned of. Cisco and Juniper embedding functionality are steadily absorbing NG platform accounts and there's no one to navigate the ever-turbulent security waters - just a few officers with no crew.

As Checkpoint has suggested better growth from acquisitions and core stability, firm's checks have found this to be far from the reality. MSCO's2007 estimated revenues $13mm below the street reflect their estimate of the real momentum or lack thereof for the company, hence they reiterate the UW rating.

Notablecalls: Not actionable but good to know category.