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Qualys (QLYS) to Post Q4 Earnings: What's in the Offing?

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Qualys, Inc. QLYS is set to report fourth-quarter 2019 results on Feb 12.

For the quarter, the company anticipates revenues of $84.3-$84.9 million. The Zacks Consensus Estimate for revenues is pegged at $84.76 million, implying growth of 14.23% from the figure reported in the year-ago quarter.

Non-GAAP earnings per share are envisioned to be 57-59 cents. The Zacks Consensus Estimate is pegged at 58 cents per share, indicating an increase of 13.73% from the figure reported in the year-ago quarter.

The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 21.43%.

Let’s see how things are shaping up for the upcoming announcement.

Qualys, Inc. Price and EPS Surprise

Qualys, Inc. Price and EPS Surprise

Qualys, Inc. price-eps-surprise | Qualys, Inc. Quote

Factors at Play

Qualys is likely to have gained from key partnerships in the fourth quarter of 2019.

Notably, in November last year, the company partnered with Microsoft (MSFT - Free Report) to integrate Qualys Vulnerability Management and Qualys Container Security into Microsoft Azure. Also, in the following month, the company partnered with Alphabet’s GOOGL cloud division —Google Cloud — to integrate Qualys Cloud Agent into the platform.

The fourth-quarter performance is also expected to have continued to benefit from the strong adoption of the company’s Global Asset Discovery and Inventory application, which was introduced in the previous quarter and has shown solid traction since then.

However, foreign exchange fluctuations are expected to have weighed on margins by less than 100 basis points.

Moreover, capital expenditures of $9-$10 million, including approximately $3.5 million for the first phase of the building of a new Qualys office in Pune, India, are expected to have kept margins under pressure.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for Qualys this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Qualys has an Earnings ESP of 0.00% and a Zacks Rank #3.

A Stock to Consider

Here is a stock you may consider, as our model shows that it has the right combination of elements to beat on earnings this season:

Applied Materials, Inc. AMAT has an Earnings ESP of +2.89% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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