Qualys stock holds steady with $130 target from DA Davidson

Wednesday, Qualys Inc . (NASDAQ:QLYS) maintained its Neutral rating and a $130.00 price target from DA Davidson. The firm’s stance came after the company’s first-quarter results, which showed revenue and EBITDA surpassing expectations. According to InvestingPro data, Qualys demonstrates impressive financial health with a "GREAT" overall score and maintains strong gross profit margins of 81.65%. However, the growth in the company’s Core Customer Base (CCB) slowed down to 7% year-over-year compared to the 13% growth seen in the previous quarter. This deceleration was attributed mainly to the timing of invoices. The company’s overall revenue growth remains steady at 9.58% over the last twelve months, with an EBITDA of $205.71 million.

DA Davidson noted that Qualys’ revenue guidance for the second to fourth quarters was revised down by approximately $1.5 million at the midpoint. This adjustment was due to increased deal scrutiny towards the end of the quarter, which has now been factored into the revised guidance for the calendar year 2025. Despite the lowered revenue outlook, the firm pointed out that expectations for CCB growth in CY25 remain at a rate of 6-8% year-over-year, albeit with a possibility of it being slightly lower.

The company’s guidance for earnings per share (EPS), EBITDA, and free cash flow (FCF) for the year was increased, signaling a strong financial performance. Nonetheless, the growth projections for the end of CY25 were implied to be lower, which seems to have influenced the research firm’s continued Neutral stance on the stock.

DA Davidson’s analyst commented on the results and guidance, stating, "Q1 results were solid with Rev & EBITDA nicely ahead though CCB growth slowed to +7% Y/Y vs. +13% Y/Y last quarter. mostly due to invoice timing while Q2-Q4 Rev guidance was lowered ~$1.5M at the mid-point as management called out increased deal scrutiny towards quarter end, which is now baked into revised CY25 guidance. CY25 CCB growth expectations of +6-8% Y/Y was loosely reiterated, though we wouldn’t be surprised to see it come in a bit lower than that. EPS / EBITDA / FCF guidance all raised nicely, though growth exiting CY25 implied lower. NEUTRAL; $130 PT."

In other recent news, Qualys Inc. reported its first-quarter 2025 earnings, significantly surpassing market expectations. The company achieved an earnings per share (EPS) of $1.67, exceeding the forecasted $1.47, and recorded revenue of $159.9 million, above the anticipated $157.11 million. This marks a 10% year-over-year increase in revenue, bolstered by a notable 16% growth in international revenue. The company’s strategic focus on expanding channel partnerships contributed to channel revenue making up 49% of total revenue, up from 45% the previous year.

Qualys also introduced new products in AI and cloud security sectors, reflecting its commitment to innovation. Despite these advancements, the company acknowledged ongoing macroeconomic uncertainties that could affect future sales cycles. Analysts have not provided any new upgrades or downgrades, but the firm’s solid financial performance is evident. The company’s guidance for full-year 2025 projects revenue between $648 million and $657 million, with an EPS range of $6.00 to $6.30.

Qualys continues to emphasize its focus on expanding its partner ecosystem and federal market presence. The company remains optimistic about its growth prospects, highlighting the traction of its Risk Operations Center with large enterprises.

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