Qualys (QLYS) AI Stock Analysis

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Qualys

(NASDAQ:QLYS)

78Outperform

Qualys demonstrates strong financial performance with impressive revenue and profit growth, supported by solid cash flows and a conservative balance sheet. The stock shows positive momentum but is nearing overbought levels, suggesting potential short-term volatility. While the valuation reflects growth potential, the lack of a dividend may deter some investors. The earnings call highlighted strengths in innovation and channel growth but also underscored economic uncertainties and rising expenses. Overall, Qualys is well-positioned for future growth, though investors should remain mindful of market conditions.

Positive Factors

Earnings and Financial Performance

Qualys reported a solid quarter, beating consensus on revenue by $2.8 million and pro forma EPS by $0.21.

Product and Partnership Milestones

There is enthusiasm for Qualys's product and partnership milestones, including interest in its TotalAI LLM security product and the introduction of its Managed Risk Operation Center.

Negative Factors

Competitive Pressures

There are concerns about growing competitive headwinds from legacy virtual machine providers and XDR platform providers.

Macroeconomic Uncertainty

Incremental revenue from new customers is expected to face more pressure with an uptick in macroeconomic uncertainty.

Qualys (QLYS) vs. S&P 500 (SPY)

Market Cap

$4.97B

Dividend YieldN/A

Average Volume (3M)366.70K

Price to Earnings (P/E)28.0

Beta (1Y)1.16

Revenue Growth9.58%

EPS Growth12.41%

CountryUS

Employees2,443

SectorTechnology

Sector Strength76

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)1.67

Shares Outstanding36,326,126

10 Day Avg. Volume393,448

30 Day Avg. Volume366,697

Financial Highlights & Ratios

PEG Ratio12.40

Price to Book (P/B)9.75

Price to Sales (P/S)0.00

P/FCF Ratio20.02

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$130.00

Price Target Upside-5.03% Downside

Rating ConsensusHold

Number of Analyst Covering14

Qualys Business Overview & Revenue Model

Company DescriptionQualys, Inc. provides cloud-based information technology (IT), security, and compliance solutions in the United States and internationally. The company offers Qualys Cloud Apps, which includes Vulnerability Management; Vulnerability Management, Detection and Response; Threat Protection; Continuous Monitoring; Patch Management; Multi-Vector Endpoint Detection and Response; Certificate Assessment; SaaS Detection and Response; Secure Enterprise Mobility; Policy Compliance; Security Configuration Assessment; PCI Compliance; File Integrity Monitoring; Security Assessment Questionnaire; Out of-Band Configuration Assessment; Web Application Scanning; Web Application Firewall; Global Asset Inventory; Cybersecurity Asset Management; Certificate Inventory; Cloud Inventory; Cloud Security Assessment; and Container Security. Its integrated suite of IT, security, and compliance solutions delivered on its Qualys Cloud Platform enables customers to identify and manage IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend and implement remediation actions, and verify the implementation of such actions. The company also provides asset tagging and management, reporting and dashboards, questionnaires and collaboration, remediation and workflow, big data correlation and analytics engine, and alerts and notifications, which enable integrated workflows, management and real-time analysis, and reporting across IT, security, and compliance solutions. The company offers its solutions through its sales teams, as well as through its network of channel partners, such as security consulting organizations, managed service providers, resellers, and consulting firms. It serves enterprises, government entities, and small and medium-sized businesses in various industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology, and utilities. The company was incorporated in 1999 and is headquartered in Foster City, California.

How the Company Makes MoneyQualys generates revenue primarily through subscriptions to its cloud-based platform, where customers pay recurring fees to access its suite of security and compliance solutions. The company's revenue model is based on a Software-as-a-Service (SaaS) approach, which provides predictable and recurring revenue streams. Key revenue streams include vulnerability management, policy compliance, and web application security solutions. Qualys also benefits from strategic partnerships with managed security service providers (MSSPs) and channel partners, which help expand its market reach and customer base. The company’s focus on innovation and continuous platform enhancements also contributes to customer retention and attraction of new clients.

Qualys Key Performance Indicators (KPIs)

Any

Customers Over $500,000 in Annual Revenue

Customers Over $500,000 in Annual Revenue
Tracks the number of high-value customers contributing significant revenue, indicating the company's success in securing and maintaining large accounts.

Chart InsightsQualys has seen a consistent increase in customers generating over $500,000 annually, nearly doubling since mid-2019. This growth reflects strong demand for their cybersecurity solutions. However, the slight dip in early 2025 suggests potential challenges in maintaining this momentum, possibly due to market saturation or competitive pressures. Investors should watch for strategic initiatives to sustain growth and address these headwinds.

Data provided by:

Main Street Data

Qualys Financial Statement Overview

Summary

Qualys demonstrates strong financial health across all key financial statements. Robust revenue growth, strong profitability margins, prudent leverage, and effective cash flow management position the company well for future growth. The firm maintains a balanced and stable financial structure, showcasing resilience and operational efficiency in the competitive software industry.

Income Statement

Very Positive

Qualys exhibits strong revenue growth, with a 9.57% increase in 2024. The gross profit margin remained robust at 81.64%, indicating efficient cost management. The net profit margin improved to 28.60%, reflecting solid profitability. EBIT and EBITDA margins at 30.81% indicate healthy operational efficiency. Overall, the income statement reflects a positive trajectory with stable profitability and growth.

Balance Sheet

Positive

The debt-to-equity ratio is low at 0.10, showcasing prudence in leverage management. Return on equity improved to 36.40%, demonstrating effective utilization of equity to generate profits. The equity ratio stands at 49.01%, indicating a stable capital structure with a balanced mix of equity and liabilities. Overall, the balance sheet indicates financial stability and effective risk management.

Cash Flow

Very Positive

The company's free cash flow remains strong with a slight decrease of -1.72% in 2024. Operating cash flow to net income ratio is 1.41, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.33, reflecting efficient cash flow management. Overall, the cash flow statement highlights strong liquidity and effective cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
607.57M	554.46M	489.72M	411.17M	362.96M
	Gross Profit
496.09M	446.97M	386.94M	321.73M	283.74M
	EBIT
187.20M	163.07M	130.55M	87.68M	96.65M
	EBITDA
187.20M	190.06M	168.32M	125.29M	134.89M
	Net Income Common Stockholders
173.68M	151.59M	107.99M	70.96M	91.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
381.42M	425.56M	321.33M	405.29M	356.02M
	Total Assets
973.54M	812.62M	700.94M	814.56M	736.82M
	Total Debt
47.22M	28.74M	42.18M	48.52M	57.37M
	Net Debt
-184.96M	-174.92M	-131.54M	-88.81M	-16.76M
	Total Liabilities
496.42M	444.44M	411.81M	377.85M	332.34M
	Stockholders Equity
477.12M	368.17M	289.13M	436.71M	404.48M
Cash Flow		Free Cash Flow
231.76M	235.82M	174.87M	174.96M	150.05M
	Operating Cash Flow
244.09M	244.60M	198.85M	200.62M	180.09M
	Investing Cash Flow
-71.43M	-73.17M	145.07M	-29.53M	-80.93M
	Financing Cash Flow
-145.65M	-141.49M	-306.03M	-107.89M	-112.58M

Qualys Technical Analysis

Technical Analysis Sentiment

Positive

Last Price136.88

Price Trends

50DMA

126.78

Positive

100DMA

132.66

Positive

200DMA

133.08

Positive

Market Momentum

MACD

2.96

Negative

RSI

65.12

Neutral

STOCH

89.41

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QLYS, the sentiment is Positive. The current price of 136.88 is above the 20-day moving average (MA) of 128.78, above the 50-day MA of 126.78, and above the 200-day MA of 133.08, indicating a bullish trend. The MACD of 2.96 indicates Negative momentum. The RSI at 65.12 is Neutral, neither overbought nor oversold. The STOCH value of 89.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QLYS.

Qualys Risk Analysis

Qualys disclosed 49 risk factors in its most recent earnings report. Qualys reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Qualys Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	78 Outperform	$4.97B	27.97	40.23%	―	9.58%	12.41%
VRNT	72 Outperform	$1.10B	18.66	6.35%	―	-0.13%	263.78%
VRNS	66 Neutral	$5.18B	―	-22.21%	―	13.34%	13.71%
S	64 Neutral	$6.66B	―	-17.68%	―	32.25%	20.56%
RPD	61 Neutral	$1.52B	59.42	164.75%	―	6.19%	―
Sector *	60 Neutral	$11.59B	10.39	-7.23%	2.94%	7.46%	-10.76%
TENB	60 Neutral	$4.02B	―	-12.09%	―	11.79%	35.35%

* Technology Sector Average

Performance Comparison

QLYS

Qualys

136.88

-9.51

-6.50%

VRNT

Verint Systems

18.19

-14.10

-43.67%

VRNS

Varonis Systems

46.32

2.17

4.92%

RPD

Rapid7

23.72

-15.84

-40.04%

TENB

Tenable Holdings

32.90

-11.12

-25.26%

SentinelOne

20.21

-2.46

-10.85%

Qualys Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 7.93%|

Next Earnings Date:Aug 11, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced outlook with notable achievements in product innovation, channel growth, and key customer wins, offset by macroeconomic challenges and a cautious revenue growth outlook.

Q1-2025 Updates

Positive Updates

Better-than-Expected Revenue Growth

Qualys reported a 10% increase in revenue to $159.9 million, surpassing expectations for the quarter.

Increased Channel Contribution

The channel contributed 49% of total revenues, up from 45% a year ago, with channel partner revenue growing by 19%.

Strong Profitability and Cash Flow

Adjusted EBITDA for Q1 2025 was $74.8 million, representing a 47% margin, in line with last year. Free cash flow was $107.6 million, representing a 67% margin, up from 57% in the prior year.

New Product Innovations

Qualys expanded its TotalAI and TruRisk capabilities and launched new solutions like Policy Audit and Audit Fix to streamline audit operations.

High-Value Customer Wins

Qualys secured a seven-figure annual booking deal with a Global 100 media company and a Global 50 financial services company.

Negative Updates

Macro-Economic Uncertainty

Increased budget scrutiny and a challenging upsell environment were noted, with net dollar expansion rate stagnant at 103%.

Slow Growth in Direct Revenue

Direct revenue grew by only 2%, lagging behind the 19% growth in channel partner revenue.

Reduced FY Revenue Growth Guidance

Qualys expects full-year 2025 revenue growth to be in the range of 7% to 8%, a reduction from prior guidance of 6% to 8%.

Company Guidance

During Qualys' first quarter 2025 earnings call, the company provided detailed financial guidance for the year ahead. They anticipate full-year 2025 revenues between $648 million and $657 million, reflecting a growth rate of 7% to 8%. For the second quarter, projected revenues are set between $159.7 million and $162.7 million, marking an expected growth of 7% to 9%. The adjusted EBITDA margin for the year is forecasted to be in the low-to-mid 40s, with operating expenses expected to grow by 15% to 17%. Earnings per share (EPS) for the full year are projected to be in the range of $6 to $6.3, an increase from the previous guidance of $5.5 to $5.9. Capital expenditures for 2025 are planned to be between $8 million and $11 million. The company also highlighted significant growth in its channel partner contributions, which made up 49% of total revenues, and saw a 19% increase in revenues from channel partners, outpacing direct revenue growth of 2%.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.