Needham analyst Alex Henderson has maintained their neutral stance on QLYS stock, giving a Hold rating on May 8.
Alex Henderson has given his Hold rating due to a combination of factors surrounding Qualys’s current strategic investments and their impact on financial performance. Qualys is actively investing in expanding its channel partnerships and building sales capacity in an effort to reignite growth and gain market share, which Henderson acknowledges as necessary after a period of under-investment. However, these investments are anticipated to surpass revenue growth in the near term, leading to a decline in earnings, which may not sit well with investors seeking immediate returns.
Despite the cautious stance, Henderson believes that Qualys’s management has made a difficult yet appropriate decision for the company’s long-term success. He has slightly lowered the revenue estimate for fiscal year 2024 while only marginally increasing the EPS projection, reflecting a conservative outlook based on the company’s recent performance. The critical test for Qualys moving forward will be their ability to translate these investments into significant revenue growth over time, something which the current lukewarm revenue growth and guidance have yet to demonstrate.
According to TipRanks, Henderson is a 5-star analyst with an average return of 11.8% and a 55.26% success rate. Henderson covers the Technology sector, focusing on stocks such as HashiCorp, Akamai, and Ceragon Networks.
In another report released on May 8, RBC Capital also maintained a Hold rating on the stock with a $180.00 price target.
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Qualys (QLYS) Company Description:
Qualys, Inc. engages in the provision of cloud security and compliance solutions. Its products enable organizations to identify security risks to information technology infrastructures; help protect information technology systems and applications from cyber attacks; and achieve compliance with internal policies and external regulations. The firm also offers solutions through a software-as-a-service model, primarily with renewable annual subscriptions. The company was founded by Philippe F. Courtot on December 30, 1999 and is headquartered in Foster City, CA.
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