Qualys
QLYS
$183.25
+13.78%
Qualys is a cloud security and compliance solutions provider that helps businesses identify and manage their security risks and compliance requirements. The California-based company has more than 10,000 customers worldwide, the majority of which are small- and medium-size businesses. Qualys was founded in 1999 and went public in 2012. As a pure-play cloud security vendor, Qualys differentiates itself through its integrated platform that unifies vulnerability management, compliance, and web application security. The current investor narrative centers on the company's accelerating growth, with a 10.5% YoY revenue increase in Q1 2026, and its strategic positioning in the rapidly expanding cybersecurity market, though recent stock volatility suggests debates over valuation and competitive pressures.…
QLYS
Qualys
$183.25
Investment Opinion: Should I buy QLYS Today?
Based on the analysis, I rate QLYS as a Hold. The company has strong profitability and a solid balance sheet, but the decelerating growth and cautious analyst outlook limit upside. The average analyst target of $131.13 implies a 9.4% downside, and the consensus recommendation is hold, suggesting that the stock is fairly valued at current levels.
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QLYS 12-Month Price Forecast
The AI assessment is neutral, reflecting the balanced risk-reward profile. The company's strong profitability and reasonable forward valuation are offset by decelerating growth and a cautious analyst outlook. The key factor to watch is whether revenue growth can stabilize or reaccelerate. If growth picks up, the stance would upgrade to bullish; if it continues to slow, it would downgrade to bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Qualys's 12-month outlook, with a consensus price target around $133.35 and implied upside of -27.2% versus the current price.
Average Target
$133.35
0 analysts
Implied Upside
-27.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$90 - $190
Analyst target range
Qualys is covered by 18 analysts, with a consensus recommendation of 'hold' and a mean rating of 2.67 (where 1 is strong buy and 5 is sell). The average target price is $131.13, which implies a downside of 9.4% from the current price of $144.75. The distribution includes 5 buys, 10 holds, and 3 sells, indicating a cautious stance. The low target of $90 suggests significant downside risk, while the high target of $190 implies a 31.3% upside, reflecting a wide range of expectations. Recent actions show mixed sentiment, with upgrades from Scotiabank and JP Morgan, but a downgrade from William Blair, highlighting uncertainty about the stock's future performance.
Bulls vs Bears: QLYS Investment Factors
Qualys presents a mixed picture: strong profitability and a solid balance sheet are offset by decelerating growth and a cautious analyst outlook. The bull case relies on the company's ability to reaccelerate growth through new products and market expansion, while the bear case centers on competitive pressures and valuation concerns. Currently, the bearish evidence is slightly stronger due to the clear growth slowdown and the stock's underperformance relative to the market. The key tension is whether Qualys can reignite growth to justify its premium valuation, or if the deceleration is a structural trend that will lead to further multiple compression.
Bullish
- Strong Gross Margins: Qualys maintains a gross margin of 83.4% in Q1 2026, up from 82.2% in Q2 2024, indicating robust pricing power and operational efficiency. This high margin provides a solid foundation for profitability and competitive advantage.
- Consistent Revenue Growth: Revenue has grown for eight consecutive quarters, from $148.7M in Q2 2024 to $176.6M in Q1 2026, a 10.5% YoY increase. This steady expansion demonstrates sustained demand for its cloud security solutions.
- High Net Margin and Profitability: With a net margin of 29.6% and operating margin of 33.2%, Qualys is highly profitable. The company generated $290.5M in free cash flow over the trailing twelve months, supporting reinvestment and shareholder returns.
- Low Debt and Strong Balance Sheet: Debt-to-equity is only 0.17, and the current ratio is 1.41, indicating a solid liquidity position. This financial stability reduces bankruptcy risk and provides flexibility for strategic initiatives.
Bearish
- Decelerating Revenue Growth: Revenue growth has slowed from 18.7% in Q2 2024 to 10.5% in Q1 2026, indicating a maturing market and increased competition. This deceleration may pressure the stock's premium valuation.
- Analyst Consensus is Hold: With a mean rating of 2.67 (hold) and an average target price of $131.13, analysts see limited upside—actually a 9.4% downside from the current price of $144.75. This cautious stance reflects concerns about growth sustainability.
- Stock Underperforms Market: Over the past year, QLYS gained only 8.8% versus the S&P 500's 18.2%, and relative strength over 1 year is -9.4%. This underperformance may indicate weaker investor sentiment and potential for continued lag.
- High Valuation Premium: The trailing PE of 24.2x is above the industry average of 22x, and the PS ratio of 7.18x is elevated. If growth continues to slow, the stock could face multiple compression.
QLYS Technical Analysis
Qualys has been in a strong uptrend over the past year, with the stock price rising 8.8% from a year ago, though this underperforms the S&P 500's 18.2% gain. The current price of $144.75 sits at 86.2% of its 52-week range (between $74.51 and $167.86), indicating the stock is trading near the higher end of its range, reflecting positive momentum but also potential overextension. The stock's beta of 0.605 suggests it is less volatile than the market, which may appeal to risk-averse investors, but the recent price action shows significant swings.
Beta
0.58
0.58x market volatility
Max Drawdown
-50.5%
Largest decline past year
52-Week Range
$75-$202
Price range past year
Annual Return
+40.3%
Cumulative gain past year
| Period | QLYS Return | S&P 500 |
|---|---|---|
| 1m | +15.8% | +2.5% |
| 3m | +93.0% | +5.2% |
| 6m | +65.4% | +11.5% |
| 1y | +40.3% | +22.6% |
| ytd | +39.9% | +12.9% |
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QLYS Fundamental Analysis
Qualys reported Q1 2026 revenue of $176.6 million, a 10.5% increase YoY, with sequential growth from $175.3 million in Q4 2025. The company has consistently grown revenue over the past eight quarters, from $148.7 million in Q2 2024 to $176.6 million in Q1 2026, though the growth rate has moderated from 18.7% in Q2 2024 to 10.5% in Q1 2026. This deceleration is a key concern, but the company's focus on cloud security and compliance solutions continues to drive demand. The gross margin remains robust at 83.4% in Q1 2026, up from 82.2% in Q2 2024, indicating strong pricing power and operational efficiency.
Quarterly Revenue
$176648000.0B
2026-03
Revenue YoY Growth
+10.5%
YoY Comparison
Gross Margin
83.4%
Latest Quarter
Free Cash Flow
$290487000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is QLYS Overvalued?
Given that Qualys is profitable, the PE ratio is the most appropriate valuation metric. The trailing PE is 24.2x, while the forward PE is 17.5x, implying the market expects significant earnings growth. This gap of 38% suggests that analysts anticipate a substantial acceleration in EPS, which is supported by the estimated EPS of $10.10 for the next fiscal year, up from the current EPS of $1.42 in Q1 2026. Compared to the industry average PE of 22x, Qualys trades at a 10% premium, which may be justified by its superior gross margins and net margin of 29.6%.
PE
24.2x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 15x~61x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.8x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include the deceleration in revenue growth from 18.7% to 10.5% over the past two years, which could lead to lower-than-expected earnings and a de-rating of the stock. The company's high gross margin of 83.4% is a strength, but if competition intensifies, pricing pressure could erode this margin. Additionally, the current ratio of 1.41 and low debt-to-equity of 0.17 provide a cushion, but the company's reliance on continued growth to justify its valuation is a risk. If growth falls below 10%, the forward PE of 17.5x could be seen as too high, leading to a sell-off.