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Qualys (NasdaqGS:QLYS) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Qualys, Inc. (NasdaqGS:QLYS) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $0.67/share on revenue of $91.971 million. The consensus earnings per share (EPS) of $0.67/share is based on a poll of 16 analysts and represents a growth in eps of 1.0% over the same quarter last year, when the company reported earnings of $0.66/share.

The revenue forecast of $91.971 million based on a poll of 14 analysts implies a year-over-year (YoY) growth in revenue of 11.2%. Last year the company reported $82.671 million in revenue for the quarter.

Expected to report EPS growth of 1.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $91.97 $82.67 11.2%
EPS $0.67 $0.66 1.0%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Qualys, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.64 $0.74 16.5% Beat
Q1, 2020 $0.60 $0.65 8.0% Beat
Q4, 2019 $0.59 $0.64 8.6% Beat
Q3, 2019 $0.53 $0.66 23.8% Beat
Q2, 2019 $0.47 $0.55 17.3% Beat
Q1, 2019 $0.42 $0.49 17.1% Beat
Q4, 2018 $0.40 $0.51 27.7% Beat
Q3, 2018 $0.38 $0.49 28.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −13.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 10, 2020 $120.39 $104.76 −13.0% Decline
May 7, 2020 $105.41 $104.40 −1.0% Decline
February 12, 2020 $89.61 $90.08 0.5% Increase
October 30, 2019 $82.63 $85.33 3.3% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.90, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.90 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Qualys, Inc. is currently trading at $91.89/share, down −4.3% for the day. The company is trading at approximately 73.5% of its 52-week high of $125.22/share. The company’s stock price is down −12.3% since the last earnings report and down −6.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.68 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:QLYS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 42.64 and a forward P/E multiple of 34.86.

Qualys, Inc.’s current share price also implies a price-to-book (P/B) multiple of 8.87. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $91.89
P/E Ratio 42.6x
P/E Ratio (Fwd) 34.9x
PEG Ratio 1.6
Total Debt / Total Capital 1.4%
Levered Free Cash Flow $136 million
EV / EBITDA 26.6x

Finbox

Qualys, Inc. is a mid-cap stock with a market capitalization of $3.769 billion and a total enterprise value of $3.378 billion. The company operates in the Information Technology sector and the Software industry.

Qualys, Inc. provides cloud-based platform that delivers information technology (IT), security, and compliance solutions in the United States and internationally. The company offers Qualys Cloud Apps, which includes Asset Inventory, CMDB Sync, Vulnerability Management, Continuous Monitoring, Patch Management, Threat Protection, Security Configuration Assessment, Indication of Compromise, Policy Compliance, PCI Compliance, Security Assessment Questionnaire, File Integrity Monitoring, Web Application Scanning, and Web Application Firewall, as well as Cloud Inventory, Cloud Security Assessment, and Container Security. Its integrated suite of security and compliance solutions delivered on its Qualys Cloud Platform enables customers to identify IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend and implement remediation actions, and verify the implementation of such actions. The company also provides core services, including asset tagging and management, reporting and dashboards, questionnaires and collaboration, remediation and workflow, big data correlation and analytics engine, and alerts and notifications, which enable integrated workflows, management and real-time analysis, and reporting across IT, security, and compliance solutions. The company markets and sells its IT, security, and compliance solutions to customers directly through its sales teams, as well as indirectly through its network of channel partners, such as security consulting organizations, managed service providers and resellers, and consulting firms. It serves enterprises, government entities, and small and medium-sized businesses in various industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology, and utilities. The company was founded in 1999 and is headquartered in Foster City, California.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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