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Qualys (QLYS)
NASDAQ:QLYS
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Qualys
(NASDAQ:QLYS)73Outperform
Positive Factors
Financial Performance
QLYS generated strong 4Q results with Revenue, Current Billings, EPS and Adjusted EBITDA ahead of consensus.
Negative Factors
Executive Turnover
The departure of the Chief Revenue Officer marks the second executive exit in six months, potentially constraining management's focus.
Profit Guidance
Lower-than-expected profit guidance of $5.50-$5.90 EPS is ultimately creating the softness seen in shares in the aftermarket.
Qualys (QLYS) vs. S&P 500 (SPY)
Market Cap
$4.73B
Dividend YieldN/A
Average Volume (3M)348.27K
Price to Earnings (P/E)27.4
Beta (1Y)1.35
Revenue Growth10.40%
EPS Growth14.78%
CountryUS
Employees2,188
SectorTechnology
Sector Strength48
IndustrySoftware
Share Statistics
EPS (TTM)4.65
Shares Outstanding36,477,673
10 Day Avg. Volume270,015
30 Day Avg. Volume348,268
Financial Highlights & Ratios
PEG Ratio1.85
Price to Book (P/B)N/A
Price to Sales (P/S)7.79
Price to Cash Flow (P/CF)24.80
P/FCF Ratio24.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.91Price Target Upside9.87% Upside
Rating ConsensusHold
Number of Analyst Covering14
Qualys Business Overview & Revenue Model
Company DescriptionQualys, Inc. (NASDAQ: QLYS) is a leading provider of cloud-based security and compliance solutions. Founded in 1999, the company offers a wide range of services designed to help organizations streamline and automate their IT security and compliance processes. Qualys' core products include vulnerability management, policy compliance, web application scanning, and security assessment. Operating primarily within the cybersecurity sector, the company serves businesses of all sizes across various industries.
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 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
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.85
Very Positive
Balance Sheet
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.80
Positive
Cash Flow
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.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
127.34
Price Trends
138.27
Negative
139.79
Negative
136.66
Negative
Market Momentum
-3.21
Positive
34.66
Neutral
23.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QLYS, the sentiment is Negative. The current price of 127.34 is below the 20-day moving average (MA) of 135.68, below the 50-day MA of 138.27, and below the 200-day MA of 136.66, indicating a bearish trend. The MACD of -3.21 indicates Positive momentum. The RSI at 34.66 is Neutral, neither overbought nor oversold. The STOCH value of 23.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $119.79B | 102.21 | 23.38% | ― | 13.86% | -46.44% | |
79 Outperform | $25.32B | 30.86 | 30.15% | ― | 6.22% | 6.15% | |
79 Outperform | $78.22B | 44.81 | 338.74% | ― | 12.27% | 54.69% | |
78 Outperform | $16.53B | 1,777.39 | -5.91% | ― | 33.10% | -20.31% | |
77 Outperform | $82.14B | 721.64 | -0.69% | ― | 31.35% | ― | |
73 Outperform | $4.73B | 27.36 | 41.09% | ― | 10.40% | 14.78% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% |
* Technology Sector Average
Performance Comparison
QLYS
Qualys
127.34
-45.17
-26.18%
CHKP
Check Point
230.20
66.73
40.82%
FTNT
Fortinet
101.28
29.82
41.73%
PANW
Palo Alto Networks
180.93
39.27
27.72%
CYBR
CyberArk Software
335.45
72.31
27.48%
CRWD
CrowdStrike Holdings
333.50
16.13
5.08%
Qualys Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -9.50% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Qualys delivered strong financial results with significant product innovation and channel growth. However, challenges such as the CRO transition, flat new bookings, and a stable net dollar expansion rate indicate some operational hurdles. Overall, the positive financial performance and strategic advancements slightly outweigh the challenges.Highlights
Strong Financial Performance
Qualys reported a 10% revenue growth to $607.6 million for the full year, with an adjusted EBITDA margin of 47%. Net income and EPS grew 16% to $229 million and $6.13 per diluted share, respectively. Free cash flow reached $231.8 million, representing 38% of revenue.
Product Innovation and Rebranding
Introduced several product enhancements, including Trulicity Eliminate and Truist Uninstall, enhancing cybersecurity asset management and patching capabilities. Launched Total Cloud 3.0, providing comprehensive CNAP solutions with multi-cloud integration.
Channel Growth and Partner Engagement
Revenues from channel partners grew 18%, outpacing direct sales growth of 3%. Channel contribution increased to 48% of total revenues, compared to 44% a year ago.
New Customer Wins
Secured significant deals, including a seven-figure annual booking with a global 100 insurance company and a mid-six-figure booking with a global shipping conglomerate, illustrating strong market demand for Qualys' solutions.
Lowlights
CRO Departure and Transition Challenges
Chief Revenue Officer Dino DiMarino resigned, potentially impacting sales strategy execution. The company is in transition, with CEO Sumedh Thakar temporarily overseeing sales.
New Logo and Booking Challenges
Q4 saw disappointing new bookings performance, and the guidance for 2025 does not expect significant improvement in new business growth.
Flat Net Dollar Expansion Rate
The Net Dollar Expansion Rate remained at 103%, unchanged from the prior quarter, reflecting challenges in upselling and expanding within existing customer accounts.
Company Guidance
During Qualys' fourth quarter 2024 earnings call, guidance for the upcoming fiscal year 2025 was provided, highlighting a revenue growth expectation of 6% to 8%, translating to a revenue range of $645 million to $657 million. Adjusted EBITDA margin is anticipated to remain in the low 40s, with free cash flow margin projected in the low to mid-30s. Earnings per share (EPS) for the full year 2025 is estimated between $5.50 and $5.90. For the first quarter of 2025, the company guided revenue to be between $155.5 million and $158.5 million, with an EPS range of $1.40 to $1.50. The company emphasized continued investments in sales and marketing, particularly focusing on partnerships and federal business expansion, while anticipating a stable selling environment with ongoing budget scrutiny.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.