Cautious Outlook on Qualys Amid Market Challenges and Stagnant Growth Potential

In a report released today, Shaul Eyal from TD Cowen maintained a Hold rating on Qualys, with a price target of $135.00.

Shaul Eyal has given his Hold rating due to a combination of factors impacting Qualys’s market position. The company is expected to surpass earnings per share (EPS) estimates in the second quarter of 2025, largely due to management’s focus on cost discipline amid a challenging demand environment. This environment is influenced by factors such as DOGE-related budget cuts, tariff uncertainties, and increased competition, which collectively constrain the company’s growth potential.
Despite management’s efforts to leverage partnerships for growth and optimize new customer acquisition, the upsell environment remains stagnant, with net dollar expansion rates capped at 103%. The company’s cloud security solutions, which represent a small portion of bookings, lack the scale needed to significantly boost top-line growth. Additionally, the bundling of virtual machine (VM) offerings with other security tools by platform vendors poses a competitive challenge. As a result, Eyal maintains a Hold rating with a price target of $135, reflecting a cautious outlook on Qualys’s ability to achieve substantial growth in the near term.