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Monday, DA Davidson reiterated a Neutral rating on Qualys shares (NASDAQ: NASDAQ:QLYS) with a price target of $130.00. The stock, currently trading at $131.75, has shown relatively low volatility with a beta of 0.56. According to InvestingPro analysis, the company maintains impressive gross profit margins of 81.65% and holds a market capitalization of $4.8 billion. Qualys, known for its cloud security and compliance solutions, received attention following discussions with company executives last week. Rudy Kessinger of DA Davidson highlighted the potential of the company’s new Enterprise TruRisk Management (ETM) platform during investor meetings with Qualys President & CEO Sumedh Thakar, CFO Joo Mi Kim, and Head of Investor Relations Blair King.
The analyst expressed a heightened understanding and appreciation for Qualys’ strategic direction, emphasizing the ETM platform’s ability to create considerable cross-sell and upsell opportunities. This new offering is expected to facilitate less competitive deals because it may not require displacing existing vulnerability management (VM) competitors.
Kessinger noted that while the pipeline build and initial traction with the ETM platform appear promising, its potential to significantly reaccelerate growth is projected for the fiscal year 2026 rather than 2025. This timeline suggests that investors may need to wait for the full impact of the ETM platform on Qualys’ business performance. The company currently demonstrates solid fundamentals with a 9.58% revenue growth and strong financial health, earning a "GREAT" rating on InvestingPro, which offers 8 additional key insights about Qualys’s growth potential.
Qualys’ ETM platform is designed to provide a comprehensive risk management solution, which could ultimately enhance the company’s competitive edge in the cybersecurity space. The platform’s introduction is part of Qualys’ broader strategy to expand its offerings and market reach.
The maintained price target of $130.00 reflects DA Davidson’s current valuation of Qualys stock based on the firm’s analysis of the company’s market position and future prospects. Trading at a P/E ratio of 27.86, the stock’s valuation metrics and comprehensive analysis are available in the detailed Pro Research Report on InvestingPro, along with expert insights and peer comparisons. As of the last trading session, Qualys’ stock price will continue to be monitored by investors for signs of progress in line with the company’s strategic initiatives and product developments.
In other recent news, Qualys has been the focus of analyst activity, with mixed assessments from financial firms. Canaccord Genuity maintained a Buy rating on Qualys but lowered the stock’s price target from $170 to $163, citing a growth trough expected in the second quarter of 2024. The firm remains optimistic about Qualys’ long-term prospects, emphasizing potential improvements in calculated billings and strategic product advancements by 2025. Baird, on the other hand, increased its price target for Qualys to $150 from $145 while maintaining a Neutral rating, highlighting the company’s strong operating and free cash flow margins. Despite challenges in the core vulnerability management business, Baird anticipates revenue growth in the mid-to-high teens percentage range by 2025. Both firms acknowledge the competitive pressures facing Qualys, yet note its adherence to the Rule-of-40, which signifies a healthy balance of growth and profitability. Canaccord Genuity believes Qualys’ strategic initiatives could bolster its future performance, while Baird points out the standardization challenges in the cybersecurity industry. These recent developments provide a varied outlook on Qualys, reflecting both its potential and the hurdles it faces.
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