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Qualys Trades Near 52-Week Low: Is it the Right Time to Buy the Stock?
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Qualys (QLYS - Free Report) shares have plunged 35.2% year to date. It has significantly underperformed the broader tech sector and the S&P 500’s return of 23.4% and 20.8%, respectively, over the same time frame. At the closing price of $127.13 on Oct. 4, 2024, Qualys currently trades near its 52-week low of $126 and nearly 38% lower than its 52-week high of $206.4.
Reason Behind Qualys’ Underperformance
The underperformance of Qualys’ shares can be attributable to highly volatile market conditions amid the ongoing macroeconomic uncertainties. Factors, including investors’ concerns over the Federal Reserve's interest rate policies and fears of a looming U.S. recession, have weighed on the cybersecurity stocks and that has not spared Qualys either.
Qualys’ sluggish sales growth has also made investors cautious about its near-term prospects. The company’s revenue growth rate decelerated to a single-digit percentage range in the second quarter of 2024 compared with the strong double-digit percentage growth rate it has registered for every quarter since 2013. Enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic uncertainties, hurting QLYS’ top-line performance.
Some cybersecurity players have also pointed out that organizations are delaying or taking more time in finalizing deals or even rightsizing deals in the current uncertain macroeconomic environment. Changes in customer spending patterns are hurting QLYS’ top-line growth.
Despite the near-term challenges, it’s not all doom and gloom for Qualys. Once the current macroeconomic headwinds subside, QLYS is well-positioned to resume its growth trajectory, driven by its strong fundamentals and promising long-term outlook.
Qualys YTD Price Performance
Image Source: Zacks Investment Research
Qualys’ Strong Fundamentals and Growth Drivers
Qualys benefits from the growing cybersecurity space driven by a long list of data breaches. The introduction of artificial intelligence and cloud computing has given rise to a range of sophisticated cyberattacks that have created a big market for Qualys as it is growing rapidly in this space with its diversified product portfolio.
Qualys’ product portfolio ranges across cybersecurity asset management, patch management and cloud security solutions, catering to the evolving security landscape. QLYS is also benefiting from a large partner base that includes big names like Verizon, Cognizant, Fujitsu, IBM, NTT, Accenture, Infosys (INFY - Free Report) , Deutsche Telekom, Amazon Web Services, Alphabet’s (GOOGL - Free Report) Google Cloud Platform and Microsoft (MSFT - Free Report) .
Microsoft and Qualys have been partners for a long time. Earlier this year, Qualys and Microsoft collaborated to enhance MSFT’s Security Copilot product. QLYS and Alphabet’s Google Cloud have partnered to offer customers a one-click vulnerability assessment through Qualys Agent. Infosys, on the other hand, uses Qualys Vulnerability Management, Detection and Response (VMDR) and Multi-Vector Endpoint Detection and Response system in its Cyber Next Platform.
QLYS is one of the leading providers of VMDR solutions. QLYS has been witnessing increasing VMDR customer penetration for the past several quarters, which indicates the growing adoption of its VMDR solutions. At the end of the fourth quarter of 2023, VMDR customer penetration reached 56% from 48% at the end of the fourth quarter of 2022.
The Zacks Consensus Estimate also signals decent growth in the years ahead for the company. The consensus mark indicates revenues to grow in the high-single-digit percentage range in 2024 and 2025, while earnings are likely to increase in the mid-single-digit percentage range.
Final Thoughts: Buy Qualys Stock Now
Although Qualys shares have been experiencing a declining trend due to near-term macroeconomic challenges, the stock will bounce back once these headwinds subside. QLYS has a strong product portfolio and partner base, which are likely to provide traction to the demand for its products.
The stock’s attractive valuation also makes it worth investing in right now. It currently trades at a forward 12-month price-to-earnings (P/E) ratio of 22.09x, significantly lower than the Zacks Security industry’s 189.31x and the Zacks Computer and Technology sector’s 26.83x.
Image: Bigstock
Qualys Trades Near 52-Week Low: Is it the Right Time to Buy the Stock?
Qualys (QLYS - Free Report) shares have plunged 35.2% year to date. It has significantly underperformed the broader tech sector and the S&P 500’s return of 23.4% and 20.8%, respectively, over the same time frame. At the closing price of $127.13 on Oct. 4, 2024, Qualys currently trades near its 52-week low of $126 and nearly 38% lower than its 52-week high of $206.4.
Reason Behind Qualys’ Underperformance
The underperformance of Qualys’ shares can be attributable to highly volatile market conditions amid the ongoing macroeconomic uncertainties. Factors, including investors’ concerns over the Federal Reserve's interest rate policies and fears of a looming U.S. recession, have weighed on the cybersecurity stocks and that has not spared Qualys either.
Qualys’ sluggish sales growth has also made investors cautious about its near-term prospects. The company’s revenue growth rate decelerated to a single-digit percentage range in the second quarter of 2024 compared with the strong double-digit percentage growth rate it has registered for every quarter since 2013. Enterprises are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic uncertainties, hurting QLYS’ top-line performance.
Some cybersecurity players have also pointed out that organizations are delaying or taking more time in finalizing deals or even rightsizing deals in the current uncertain macroeconomic environment. Changes in customer spending patterns are hurting QLYS’ top-line growth.
Despite the near-term challenges, it’s not all doom and gloom for Qualys. Once the current macroeconomic headwinds subside, QLYS is well-positioned to resume its growth trajectory, driven by its strong fundamentals and promising long-term outlook.
Qualys YTD Price Performance
Image Source: Zacks Investment Research
Qualys’ Strong Fundamentals and Growth Drivers
Qualys benefits from the growing cybersecurity space driven by a long list of data breaches. The introduction of artificial intelligence and cloud computing has given rise to a range of sophisticated cyberattacks that have created a big market for Qualys as it is growing rapidly in this space with its diversified product portfolio.
Qualys’ product portfolio ranges across cybersecurity asset management, patch management and cloud security solutions, catering to the evolving security landscape. QLYS is also benefiting from a large partner base that includes big names like Verizon, Cognizant, Fujitsu, IBM, NTT, Accenture, Infosys (INFY - Free Report) , Deutsche Telekom, Amazon Web Services, Alphabet’s (GOOGL - Free Report) Google Cloud Platform and Microsoft (MSFT - Free Report) .
Microsoft and Qualys have been partners for a long time. Earlier this year, Qualys and Microsoft collaborated to enhance MSFT’s Security Copilot product. QLYS and Alphabet’s Google Cloud have partnered to offer customers a one-click vulnerability assessment through Qualys Agent. Infosys, on the other hand, uses Qualys Vulnerability Management, Detection and Response (VMDR) and Multi-Vector Endpoint Detection and Response system in its Cyber Next Platform.
QLYS is one of the leading providers of VMDR solutions. QLYS has been witnessing increasing VMDR customer penetration for the past several quarters, which indicates the growing adoption of its VMDR solutions. At the end of the fourth quarter of 2023, VMDR customer penetration reached 56% from 48% at the end of the fourth quarter of 2022.
The Zacks Consensus Estimate also signals decent growth in the years ahead for the company. The consensus mark indicates revenues to grow in the high-single-digit percentage range in 2024 and 2025, while earnings are likely to increase in the mid-single-digit percentage range.
Final Thoughts: Buy Qualys Stock Now
Although Qualys shares have been experiencing a declining trend due to near-term macroeconomic challenges, the stock will bounce back once these headwinds subside. QLYS has a strong product portfolio and partner base, which are likely to provide traction to the demand for its products.
The stock’s attractive valuation also makes it worth investing in right now. It currently trades at a forward 12-month price-to-earnings (P/E) ratio of 22.09x, significantly lower than the Zacks Security industry’s 189.31x and the Zacks Computer and Technology sector’s 26.83x.
Qualys sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.