Qualys (QLYS) Stock Forecast & Price Target

Qualys has demonstrated a robust financial performance with current billings growing 11% year-over-year in the third quarter, indicating a healthy re-acceleration in demand. The company surprised analysts with its earnings per share (EPS) results and has substantially raised its revenue guidance for FY25, now projecting growth of 10% year-over-year, reflecting confidence in improving gross retention and widespread adoption of its non-VM products. Additionally, the introduction of the QFlex pricing model is expected to enhance customer engagement and flexibility, potentially driving faster revenue growth and margin expansion going forward.

Qualys's stock outlook is negatively affected by a revised valuation metric, decreasing from approximately 16x to about 13x EV/C26E EBITDA, aligning it more closely with market multiples, indicating a potential overvaluation compared to peers. Additionally, the company's inability to secure subscription renewals or increases, along with diminished billings guidance projecting only a 5.5% year-over-year rise, raises concerns about its future revenue growth and overall business stability. Furthermore, the saturated vulnerability market presents increased risks to revenue growth and the perception of Qualys’s platform capabilities, potentially impacting its competitive positioning in the cloud security sector.