QLYS: Improving Execution And Buybacks Will Support Durable EPS Performance

Analysts have modestly raised their price target on Qualys to $135 from $115, citing accelerating billings growth, record operating margins, and five consecutive quarters of guidance outperformance as evidence of improved execution and a more durable growth outlook.

Analyst Commentary

Analysts interpret the recent upgrade and price target increase as a signal that execution risk has moderated and that valuation now better reflects Qualys' improving fundamentals.

Bullish Takeaways

• Bullish analysts view the acceleration in billings growth as evidence that underlying demand is strengthening, supporting a higher, more durable growth trajectory.
• Record operating margins are seen as proof of disciplined cost management and operating leverage, which can justify a premium valuation versus slower or less profitable peers.
• Five consecutive quarters of guidance outperformance are interpreted as a sign of improved forecast reliability, lowering perceived execution risk and lending confidence to forward estimates.
• The lift in the price target to $135 is framed as aligning the stock with upgraded growth and profitability assumptions, rather than purely multiple expansion.

Bearish Takeaways

• Bearish analysts remain cautious that the current pace of billings growth may be difficult to sustain in a more competitive or macro-challenged environment, which could limit upside to estimates.
• There is concern that margins, already at record levels, could face pressure if the company steps up investments to fuel future growth, which may constrain further valuation re-rating.
• Some see the move to a more neutral stance as indicating that much of the near-term improvement is now reflected in the share price, resulting in a less compelling risk reward profile from current levels.

What's in the News

• Qualys completed a major share repurchase tranche, buying back 365,513 shares for $49.44 million in the latest quarter and totaling 10,384,802 shares, or 27.19 percent of shares, repurchased under its 2018 authorization for $1.19 billion (company buyback update).
• The company issued fourth quarter 2025 guidance calling for revenue of $172.0 million to $174.0 million, implying 8 percent to 9 percent year over year growth, and GAAP EPS of $1.26 to $1.33 on roughly 36.0 million diluted shares (company guidance).
• Full year 2025 guidance was raised to revenue of $665.8 million to $667.8 million, about 10 percent growth versus 2024, with GAAP EPS now expected between $5.23 and $5.30, up from a prior range of $4.47 to $4.77 (company guidance).
• Qualys introduced new capabilities for its Enterprise TruRisk Management platform at its Risk Operations Conference, enhancing identity security for human and non human identities, improving predictive threat analysis, and validating exploitability of exposures to help security teams proactively reduce cyber risk in an era of agentic AI (product announcement).

Valuation Changes

• Fair Value: Unchanged at $142.56 per share, indicating no adjustment to the intrinsic value estimate.
• Discount Rate: Risen slightly from 8.42 percent to 8.44 percent, reflecting a marginally higher required return.
• Revenue Growth: Increased modestly from 7.40 percent to 7.95 percent, signaling a slightly stronger growth outlook.
• Net Profit Margin: Edged down slightly from 25.45 percent to 25.15 percent, implying a small reduction in expected profitability.
• Future P/E: Decreased marginally from 30.01x to 29.91x, suggesting a slightly lower valuation multiple applied to forward earnings.