On Wednesday, Truist Securities updated its stance on Qualys Inc . (NASDAQ: NASDAQ:QLYS), a provider of cloud-based security and compliance solutions. The firm raised its price target on the stock to $145 from the previous $120 while maintaining a Hold rating.
This adjustment follows Qualys's third-quarter financial performance, which surpassed expectations, particularly in the area of Network (LON:NETW) Detection and Response (NDR) due to stronger upsell performance.
Qualys's Cloud Cybersecurity and Compliance Business (CCB) segment was highlighted as a key contributor to the company's success, with a year-over-year increase of 14%, doubling the Street's forecast of 6%. Despite these gains, management has signaled a projection of lighter new business in the fourth quarter of 2024.
The company is currently increasing its direct go-to-market (GTM) investments. Truist Securities is closely monitoring Qualys for signs of re-acceleration in growth as these investments unfold. Nevertheless, the firm has expressed caution due to the uncertain demand environment and anticipated margin pressure resulting from the upcoming GTM investments.
Truist Securities has revised its estimates for Qualys based on recent performance and the current business climate. The updated price target of $145 reflects the firm's assessment of the company's value in light of these factors, while the Hold rating indicates a wait-and-see approach to the stock amidst the present uncertainties.
In other recent news, Qualys has reported strong Q3 earnings, surpassing expectations with significant revenue and earnings beats. This performance prompted DA Davidson to raise the company's target to $147 while maintaining a neutral rating.
However, there are some concerns regarding the Q4 pipeline, which appears weaker than management would prefer. Jefferies has also initiated coverage on Qualys, giving it a hold rating and setting a price target of $135, citing reservations about significant growth prospects.
Qualys has recently launched the first cloud-based Risk Operations Center (ROC) with Enterprise TruRisk Management (ETM), aimed at streamlining cybersecurity risk management. Additionally, the company introduced TruRisk Eliminate, a product designed to enhance vulnerability management, and plans to expand its GovCloud platform.
For the full year 2024, Qualys projects an 8-10% increase in revenue, estimating figures between $601.5 million and $608.5 million. However, TD Cowen has adjusted its outlook on Qualys shares twice due to decreased demand for its standalone Vulnerability Management (VM) offering and increased competition from Crowdstrike (NASDAQ:CRWD)'s new tool, Falcon Network Vulnerability Assessment.
These are recent developments that investors should consider.
InvestingPro Insights
Qualys Inc.'s recent financial performance, as highlighted in the article, is further illuminated by InvestingPro data. The company's market capitalization stands at $4.72 billion, with a P/E ratio of 27.62, suggesting a moderate valuation relative to earnings. This aligns with the InvestingPro Tip that Qualys is "Trading at a low P/E ratio relative to near-term earnings growth," which could be attractive to value-oriented investors.
The company's impressive gross profit margin of 81.5% for the last twelve months ending Q2 2024 underscores another InvestingPro Tip noting "Impressive gross profit margins." This robust profitability metric supports Qualys's ability to invest in go-to-market strategies, as mentioned in the article.
Additionally, an InvestingPro Tip reveals that "18 analysts have revised their earnings upwards for the upcoming period," which may reflect the positive sentiment following the company's strong third-quarter performance, particularly in the Network Detection and Response segment.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Qualys, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.