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Headquartered in Redwood City, CA, Qualys Inc. provides cloud security and compliance solutions, like the QualysGuard Cloud Platform, to businesses and organizations looking to protect their IT systems and applications from cyber-attacks.
Q3 Earnings Come In Strong
Revenues jumped 15% year-over-year to $83 million, just beating the Zacks Consensus Estimate of $82 million. Non-GAAP net income hit $27.2 million in Q3, or 66 cents per share.
Non-GAAP operating income increased 28% to $33.1 million, while non-GAAP gross margin was 82% for the quarter.
Qualys now has almost 800 customers that use its free Global IT Asset Discovery and Inventory solution. The company also saw nice growth in its Qualys Cloud Agent subscriptions and multi-product adoption.
And, Qualys expanded its cloud platform to the Canadian market, which brings total global operation sites to eight locations.
Year-to-date, QLYS is up 17.7%. Estimates have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).
For the current fiscal year, Qualys’ earnings are expected to grow about 29% year-over-year. Five analysts have revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has jumped 20 cents higher from $2.06 to $2.26 per share during the same time frame.
2020 looks strong too, and earnings could see growth of 8.8%; next year’s consensus estimate sits at $2.46 per share, with five upward revisions as well in the last 60 days.
Bottom Line
Management raised its GAAP non-GAAP EPS guidance for the year, and revenues are expected to grow 15%, falling in the range of $321.1 million and $321.8 million. If you’re an investor looking for a broad computer and technology stock to add to your portfolio, make sure to keep QLYS on your shortlist.
One of the biggest online travel companies in the world, Expedia offers users services like travel planning, travel purchases and travel experience sharing, plus all-in-one travel booking: hotel and resort, flights, car rentals, and vacation packages.
Shares Plunge After Disappointing Q3 Earnings
Last month, Expedia reported underwhelming earnings for its fiscal 2019 third quarter. Non-GAAP earnings of $3.38 per share lagged way behind the consensus estimate of $3.80; its bottom line also slumped 7% year-over-year. Revenue managed to grow 9% to $3.56 billion but also missed analysts’ expectations.
One of the factors that hit Expedia hard was a 10% year-over-year decrease in average revenue per ticket; management said this was due to a "reclassification of certain partner fees to other revenue and a shift in product mix.”
As a result, shares plunged more than 25% after the report was released. EXPE is now down almost 10% year-to-date compared to the S&P 500’s nearly 30% gain.
Analysts have since turned bearish on Expedia, with 11 cutting estimates in the last 60 days for the current fiscal year. The Zacks Consensus Estimate has dropped 80 cents during that same time period from $6.99 to $6.19 per share. This sentiment has stretched into 2020, and our consensus estimate has fallen over one dollar in the past two months.
EXPE is now a Zacks Rank #5 (Strong Sell).
Looking Ahead
Expedia now expects full-year adjusted EBITDA to increase 5% to 8%, down from previous forecasts of 12% to 15% growth, due to both the company’s hotel booking website Trivago and its home and vacation rental platform VRBO having reduced profitability outlooks.
Additional content:
How Will This Year’s Cyber Monday Perform Amid Trade Threats?
With online shopping burgeoning year after year, Cyber Monday has already replaced Black Friday as the biggest shopping event in the United States.Last year, Cyber Monday recorded $7.9 billion in sales, up 20% year over year and way more than Black Friday’s $6.2 billion. The trend is likely to continue this year even though the fear of trade war’s impact on sales lingers.
Forecasts Hint at Record Sales
Per Adobe Analytics, this year’s Cyber Monday sales are expected to rise 18.9% year over year to $9.4 billion, making it the largest and fastest growing online shopping day of the year. Online sales are likely to touch $143.7 billion, up 14.1% year over year.
Deloitte also estimates a 14-18% rise in e-commerce sales this holiday season to reach $144 to $149 billion. This compares with last year’s $126.4-billion sales, which grew 11.2% year over year. This year, most of the purchases are expected to be made via mobile devices, according to market watcher App Annie.
Trade War Doesn’t Seem to be an Issue
Consumers will hardly bear the brunt of price increases owing to tariffs. According to the National Retail Federation, retailers have been stocking up since last year to get past the higher tariffs.
Further, this year’s holiday season deals are coming in earlier as retailers look to make up for the potential revenue loss from the shortened period between Black Friday and Christmas. This year, Black Friday falls nearly a week later than it did in 2018.
Economic Indicators Look Encouraging
Consumers continue to look at convenience factors such as low prices, free shipping and product availability. Economic indicators like strong job data and record-low unemployment rate are encouraging shoppers to splurge online. Per the Bureau of Labor Statistics, total nonfarm payroll employment increased by 128,000 in October and unemployment rate remained at 3.6%.
Although consumer confidence took a hit in November (125.5, lagging the previous month’s revised reading of 126.1), the number did not disappoint.The Present Situation Index, which gauges consumers’ views on current market conditions, fell from 173.5 to 166.9, a result of the lingering trade conflict. Butthe Expectations Index of November, which is a measure of consumers’ short-term (for the next six months) outlook for income, business and labor market conditions, increased to 97.9 from 94.5 in October.
4 Stocks to Make the Most of the Online Rush
Amazon’s share of online holiday sales has increased steadily over the years. Netelixir expects Amazon to capture more than 44% of the total online sales this holiday season, up from last year’s 40%. Year to date, this Zacks Rank #3 (Hold) company has gained 21%.
Both Walmart and Target stand to benefit from their click-and-collect models, especially during the holiday season. This model not only eliminates chances of delayed deliveries but also helps companies save up on shipping costs.
Walmart and Target are known to offer great bargains during this season, easing customer concerns about elevated tariff-related pricing. Walmart also offers hundreds and thousands of its items under the one-day shipping category. Target and Walmart carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively. Their shares have gained a respective 96.5% and 29.5% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Qualys, Expedia, Amazon, Walmart and Target highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 2, 2019 – Zacks Equity Research Shares of Qualys Inc. (QLYS - Free Report) as the Bull of the Day, Expedia (EXPE - Free Report) asthe Bear of the Day. In addition, Zacks Equity Research provides analysis on Amazon (AMZN - Free Report) , Walmart (WMT - Free Report) and Target (TGT - Free Report) .
Here is a synopsis of all five stocks:
Bull of the Day:
Headquartered in Redwood City, CA, Qualys Inc. provides cloud security and compliance solutions, like the QualysGuard Cloud Platform, to businesses and organizations looking to protect their IT systems and applications from cyber-attacks.
Q3 Earnings Come In Strong
Revenues jumped 15% year-over-year to $83 million, just beating the Zacks Consensus Estimate of $82 million. Non-GAAP net income hit $27.2 million in Q3, or 66 cents per share.
Non-GAAP operating income increased 28% to $33.1 million, while non-GAAP gross margin was 82% for the quarter.
Qualys now has almost 800 customers that use its free Global IT Asset Discovery and Inventory solution. The company also saw nice growth in its Qualys Cloud Agent subscriptions and multi-product adoption.
And, Qualys expanded its cloud platform to the Canadian market, which brings total global operation sites to eight locations.
Year-to-date, QLYS is up 17.7%. Estimates have been rising lately too, pushing the stock towards a Zacks Rank #1 (Strong Buy).
For the current fiscal year, Qualys’ earnings are expected to grow about 29% year-over-year. Five analysts have revised their estimate upwards in the past 60 days, and the Zacks Consensus Estimate has jumped 20 cents higher from $2.06 to $2.26 per share during the same time frame.
2020 looks strong too, and earnings could see growth of 8.8%; next year’s consensus estimate sits at $2.46 per share, with five upward revisions as well in the last 60 days.
Bottom Line
Management raised its GAAP non-GAAP EPS guidance for the year, and revenues are expected to grow 15%, falling in the range of $321.1 million and $321.8 million. If you’re an investor looking for a broad computer and technology stock to add to your portfolio, make sure to keep QLYS on your shortlist.
Bear of the Day:
One of the biggest online travel companies in the world, Expedia offers users services like travel planning, travel purchases and travel experience sharing, plus all-in-one travel booking: hotel and resort, flights, car rentals, and vacation packages.
Shares Plunge After Disappointing Q3 Earnings
Last month, Expedia reported underwhelming earnings for its fiscal 2019 third quarter. Non-GAAP earnings of $3.38 per share lagged way behind the consensus estimate of $3.80; its bottom line also slumped 7% year-over-year. Revenue managed to grow 9% to $3.56 billion but also missed analysts’ expectations.
One of the factors that hit Expedia hard was a 10% year-over-year decrease in average revenue per ticket; management said this was due to a "reclassification of certain partner fees to other revenue and a shift in product mix.”
As a result, shares plunged more than 25% after the report was released. EXPE is now down almost 10% year-to-date compared to the S&P 500’s nearly 30% gain.
Analysts have since turned bearish on Expedia, with 11 cutting estimates in the last 60 days for the current fiscal year. The Zacks Consensus Estimate has dropped 80 cents during that same time period from $6.99 to $6.19 per share. This sentiment has stretched into 2020, and our consensus estimate has fallen over one dollar in the past two months.
EXPE is now a Zacks Rank #5 (Strong Sell).
Looking Ahead
Expedia now expects full-year adjusted EBITDA to increase 5% to 8%, down from previous forecasts of 12% to 15% growth, due to both the company’s hotel booking website Trivago and its home and vacation rental platform VRBO having reduced profitability outlooks.
Additional content:
How Will This Year’s Cyber Monday Perform Amid Trade Threats?
With online shopping burgeoning year after year, Cyber Monday has already replaced Black Friday as the biggest shopping event in the United States.Last year, Cyber Monday recorded $7.9 billion in sales, up 20% year over year and way more than Black Friday’s $6.2 billion. The trend is likely to continue this year even though the fear of trade war’s impact on sales lingers.
Forecasts Hint at Record Sales
Per Adobe Analytics, this year’s Cyber Monday sales are expected to rise 18.9% year over year to $9.4 billion, making it the largest and fastest growing online shopping day of the year. Online sales are likely to touch $143.7 billion, up 14.1% year over year.
Deloitte also estimates a 14-18% rise in e-commerce sales this holiday season to reach $144 to $149 billion. This compares with last year’s $126.4-billion sales, which grew 11.2% year over year. This year, most of the purchases are expected to be made via mobile devices, according to market watcher App Annie.
Trade War Doesn’t Seem to be an Issue
Consumers will hardly bear the brunt of price increases owing to tariffs. According to the National Retail Federation, retailers have been stocking up since last year to get past the higher tariffs.
Further, this year’s holiday season deals are coming in earlier as retailers look to make up for the potential revenue loss from the shortened period between Black Friday and Christmas. This year, Black Friday falls nearly a week later than it did in 2018.
Economic Indicators Look Encouraging
Consumers continue to look at convenience factors such as low prices, free shipping and product availability. Economic indicators like strong job data and record-low unemployment rate are encouraging shoppers to splurge online. Per the Bureau of Labor Statistics, total nonfarm payroll employment increased by 128,000 in October and unemployment rate remained at 3.6%.
Although consumer confidence took a hit in November (125.5, lagging the previous month’s revised reading of 126.1), the number did not disappoint.The Present Situation Index, which gauges consumers’ views on current market conditions, fell from 173.5 to 166.9, a result of the lingering trade conflict. Butthe Expectations Index of November, which is a measure of consumers’ short-term (for the next six months) outlook for income, business and labor market conditions, increased to 97.9 from 94.5 in October.
4 Stocks to Make the Most of the Online Rush
Amazon’s share of online holiday sales has increased steadily over the years. Netelixir expects Amazon to capture more than 44% of the total online sales this holiday season, up from last year’s 40%. Year to date, this Zacks Rank #3 (Hold) company has gained 21%.
Both Walmart and Target stand to benefit from their click-and-collect models, especially during the holiday season. This model not only eliminates chances of delayed deliveries but also helps companies save up on shipping costs.
Walmart and Target are known to offer great bargains during this season, easing customer concerns about elevated tariff-related pricing. Walmart also offers hundreds and thousands of its items under the one-day shipping category. Target and Walmart carry a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively. Their shares have gained a respective 96.5% and 29.5% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.
This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.
See their latest picks free >>
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.