Qualys (QLYS) Stock Forecast & Price Target

Qualys reported a strong performance in 4Q24, with Current Billings increasing by 13% year-over-year to $192.8 million, surpassing consensus estimates by approximately 5%. The company also demonstrated financial stability with a Net Retention Rate (NRR) of 103%, while profitability metrics remained robust, highlighted by a 10% year-over-year revenue growth to $159.9 million, which exceeded the high end of guidance. Additionally, Qualys's elevated Gross Margin of 83.5% indicates effective cost management and operational efficiency, positioning the company favorably for continued growth and strategic investment despite upcoming challenges.

Qualys is facing a concerning outlook due to guidance indicating a deceleration in revenue growth and expectations of continued low net dollar retention rates. The company forecasted 1Q25 revenue of $157 million, which represents a 1% quarter-over-quarter decrease and falls short of consensus estimates, while its projected EPS also declined 7% year-over-year against analysts' expectations. Additionally, elevated operating expenses, projected to grow by 18%-20%, raise further concerns, as they suggest potential underinvestment in sales and marketing, which could impair the company's ability to attract new customers amid competitive pressures.