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On Wednesday, RBC Capital Markets adjusted its outlook on Qualys shares (NASDAQ:QLYS), a leading provider of cloud-based security and compliance solutions. Analyst Matthew Hedberg at RBC Capital increased the price target for Qualys to $140.00, up from the previous target of $131.00. The firm maintained a Sector Perform rating on the stock. According to InvestingPro data, analyst targets for the stock range from $90 to $175, with current trading at $128.14, suggesting potential upside based on the consensus target.
Qualys has shown a robust start to the year, surpassing expectations with a 10% growth in revenue and almost 400 basis points of operating margin (OM) outperformance. The company’s first-quarter results revealed a strong performance against a backdrop of low market expectations. InvestingPro analysis shows the company maintains impressive gross profit margins of 81.65% and has received a "GREAT" financial health score, indicating solid operational efficiency. Subscribers can access 7 additional ProTips and comprehensive financial metrics on the platform.
Despite some uncertainty noted at the end of the quarter, Qualys’ guidance for the full year 2025 took into account the potential for increased budget uncertainty and a challenging environment for acquiring new business. Nevertheless, the company’s revenue and earnings per share (EPS) guidance for the calendar year 2025 were revised upward at the midpoint. Based on InvestingPro’s Fair Value analysis, the stock currently appears undervalued, presenting a potential opportunity for investors seeking exposure to the cybersecurity sector.
In addition to the financial metrics, RBC Capital found the commentary regarding Qualys’ Risk Operations Center noteworthy. This initiative is expected to become a more significant opportunity in the calendar year 2026, indicating potential future growth avenues for the company.
The price target increase to $140 from $131 by RBC Capital reflects a modest uplift in their estimates, following Qualys’ performance and guidance updates. The Sector Perform rating suggests that RBC Capital views Qualys as adequately valued at present, with the updated price target indicating a level at which the firm believes the stock should trade.
In other recent news, Qualys Inc . reported its first-quarter 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $1.67, compared to the forecasted $1.47. The company’s revenue reached $159.9 million, exceeding the anticipated $157.11 million. Despite a challenging environment for acquiring new customers, Qualys increased its 2025 EPS target significantly, more than doubling the magnitude of the Q1 beat. Analysts from Scotiabank (TSX:BNS) and Canaccord Genuity adjusted their outlooks on Qualys, with Scotiabank raising the stock price target to $142 and Canaccord reducing it to $158, both maintaining their respective ratings.
DA Davidson maintained a Neutral rating and a $130 price target, noting a slowdown in the growth of Qualys’ Core Customer Base. Qualys has been focusing on expanding its channel partnerships and saw significant growth in international revenue. The company also secured substantial contracts within the Federal market and is optimistic about the Federal sector, with multiple products soon expected to receive FedRAMP High certification. Despite macroeconomic uncertainties, Qualys remains focused on expanding its partner ecosystem and federal market presence.
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