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Bull Of The Day: Qualys (QLYS)

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Qualys (QLYS - Free Report) is a Zacks Rank #1 (Strong Buy) and it sports a F for Value and a B for Growth.  I love to see that sort of growth divergence where we have a weak value score and a strong growth score.  As a growth investor, that tells me right away that I am on the right path. This security company posted a beat in early November.  Let’s explore more about this company in this Bull of The Day article.

Description

Qualys, Inc. is a provider of cloud security and compliance solutions that enable organizations to identify security risks to their information technology infrastructures help protect their IT systems and applications from cyber-attacks. The Company's solutions are provided through its QualysGuard Cloud Platform. It offers products for vulnerability management, policy compliance, web application scanning, malware detection, and associated security products. Qualys, Inc. is headquartered in Redwood City, California.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For QLYS, I see four straight beats of the Zacks Consensus Estimate.  That is great to see, but by itself that is not enough to make the company a Zacks Rank #1 (Strong Buy).

The average positive earnings surprise over the course of the last year works out to be 8.5%.

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher. 

Over the last 60 days, earning estimates have moved up for QLYS.

This quarter has moved up from $0.90 to $0.91.

Next quarter has increased from $0.94 to $0.95.

The full fiscal year 2022 has increased from $3.54 to $3.62.

Next fiscal year has seen the estimate move from $3.88 to $4.01.

Positive movement in earnings stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation for this name isn’t low, but there is solid growth.  I see a forward PE of 31x which is very high, but the company is coming off a quarter that saw topline growth of more than 19%.  The price to book multiple is 12x.  A software name like this is an asset slim business so number is bound to be a little high. Price to sales comes in a 9x and that is a big number, but the growth is there to support it.  


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