QLYS · Qualys
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $230.29
Note written ·
How this view changed
- · Rated Low. Guidance, 9 November 2026: Qualys guided fourth-quarter 2026 calculated current billings growth to about 8% from 14% in the third quarter and fourth-quarter revenue growth to 9%–10%; the shares fell 7.86% after hours.
Price against the kill line
24.9% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $230.29, on record since 11 November 2026. The shares are down 5.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $230.29, the 29 October 2026 close and the highest of the 20 sessions before the report, would show the shares leading the S&P 500; so would fourth-quarter calculated current billings growth of 11% or more against the roughly 8% guide.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 188
- Revenue, change on a year (%)
- +10.7
- Gross margin (%)
- 83.3
- Operating margin (%)
- 35.3
- Free cash flow, four quarters ($M)
- 324
- Net cash, cash less debt ($M)
- 357
- Price to earnings (×)
- 28.3
- Enterprise value to sales (×)
- 7.9
All filed numbers
What Qualys reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 188 | +10.7 | 83.3 | 35.3 |
| first filed | 182 | +11.0 | 83.4 | 34.0 |
| first filed | 176 | +9.8 | 82.9 | 34.7 |
| first filed | 175 | +10.1 | 83.4 | 33.6 |
| first filed | 170 | +10.4 | 83.6 | 35.3 |
| first filed | 164 | +10.3 | 82.4 | 31.3 |
| Pre-tax income ($M) | 72.7 |
| Net income ($M) four quarters: 213 | 57.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −2.7 |
| Operating cash flow ($M) | 332 |
| Capital spending ($M) | 7.9 |
| Free cash flow ($M) | 324 |
| Cash and short-term investments ($M) | 357 |
| Debt ($M) | None reported |
| Net cash, cash less debt ($M) no debt reported | 357 |
| Deferred revenue ($M) +9.9% on a year | 426 |
| Backlog, orders not yet delivered ($M) +9.8% on a year | 481 |
| Receivables ($M) | 149 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 647 |
| Market value ($M) | 6,037 |
| Enterprise value, market value plus net debt ($M) no debt reported | 5,680 |
| Enterprise value to sales (×) no debt reported | 7.9 |
| Enterprise value to operating income (×) no debt reported | 22.9 |
| Price to earnings (×) | 28.3 |
| Price to book value (×) | 9.3 |
| Free-cash-flow yield (%) | 5.4 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 9.3% of shares outstanding sold short, 5.0 days of average trading to cover, −1.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $2.5M |
| 12 monthsfrom | $0 | $22.2M |
The thesis
Qualys shares look more likely to lag the S&P 500 than to lead it over the next three months. The company beat and raised on 9 November 2026, but it guided fourth-quarter calculated current billings growth down to about 8% from 14%, and the shares have kept falling since. The fourth-quarter report and first 2027 outlook, expected around 5 February 2027, show whether the slowdown is federal deal timing or a lasting trend.
The fall has not reversed. The shares closed at $202.46 on 9 November 2026, at $175.11 on 10 November 2026 and at $173.09 on 12 November 2026, the lowest close since the report. A rebound to $182.69 on 11 November 2026 did not hold into the next session.
What the price already reflects: at $173.09 on 12 November 2026 the shares sit 26.5% below the quoted 52-week high of $235.54 set on 30 October 2026, so the market has already marked down a good part of the billings slowdown. The rating is Low because analyst ratings cluster at hold, billings lead revenue, and the next hard data point falls near the end of the three-month window. In analyst-action headlines dated 10 November 2026, Jefferies, JPMorgan, UBS, Wedbush, Baird, Piper Sandler and RBC all kept hold-equivalent ratings, and Morgan Stanley kept Underweight.
Bullish and bearish views on Qualys, Inc.
The bull case on Qualys, Inc. (QLYS), in brief: third quarter beat on every line. The bear case: billings growth is guided sharply lower.
Bull case
- Third quarter beat on every line. Revenue was $188.0 million, up 11% from a year earlier, with non-GAAP earnings per share (EPS) of $2.12 and GAAP EPS of $1.62, per the company's 9 November 2026 Form 8-K exhibit. Benzinga cited estimates of $186.67 million and $1.96.
- Full-year guidance rose again. On 9 November 2026 the company raised fiscal 2026 revenue guidance to $736.9–738.9 million from $732–738 million. Non-GAAP EPS guidance rose to $8.07–8.14 from $7.74–7.88.
- Cash generation funds buybacks. Third-quarter operating cash flow was $101.8 million, up 13%, per the 8-K exhibit. Repurchases totalled $185.6 million over the first nine months of 2026.
- Most targets sit above the last close. On 10 November 2026 Canaccord Genuity raised its target to $220, JPMorgan and Jefferies set $215, UBS and Baird $210, RBC $197, and Piper Sandler and Wedbush $185. All are above the $173.09 close of 12 November 2026.
- Newer products drive customer expansion. Net dollar expansion was 108% for customers on the Enterprise TruRisk Management (ETM) or CyberSecurity Asset Management (CSAM) products, up from 107%, per Investing.com's transcript of the 9 November 2026 call. Management named new seven-figure federal wins.
Bear case
- Billings growth is guided sharply lower. Calculated current billings were $211.9 million in the third quarter, up 14%, per the 8-K exhibit. On the 9 November 2026 call, management guided to about 8% in the fourth quarter and 11% for the year.
- Revenue growth is drifting down. Fourth-quarter revenue guidance of $191.0–193.0 million implies 9%–10% growth, per the 8-K exhibit. Third-quarter growth was 11%.
- The beat leaned on federal deals. Chief Financial Officer Joo Mi Kim attributed the third-quarter outperformance mainly to federal business on the 9 November 2026 call. That raises the risk that fourth-quarter deals were pulled forward.
- Two large targets were cut. JPMorgan lowered its target to $215 from $241 on 10 November 2026, per MarketBeat, and Jefferies lowered its target to $215 from the $235 it set on 2 November 2026. Morgan Stanley raised its target only to $140 and kept Underweight.
- Overall expansion is flat. Net dollar expansion held at 105% in the third quarter, unchanged from the second, per the call transcript.
- Executives sold before the report. SEC Form 4 filings show the chief financial officer sold 2,659 shares at an average $209.66 on 2 November 2026, the chief executive 3,200 at an average $190.36 on 14 October 2026 and the chief legal officer 881 at an average $189.52 on 20 October 2026, all under Rule 10b5-1 plans.
Price setup
The shares closed at $173.09 on 12 November 2026, below the 50-day moving average of $191.01 and above the 200-day moving average of $137.33, both from adjusted daily closes as of that day. The 3-month change is −7.0%, against a reference close of $186.05 on 14 August 2026.
The range the case turns on runs from the pre-report closes to the post-report low. The shares closed at $199.63 on 5 November 2026, $190.41 on 6 November 2026 and $202.46 on 9 November 2026, then fell to $175.11 on 10 November 2026 and $173.09 on 12 November 2026. A return above the 50-day average would put the shares back in the pre-report range.
The longer record shows how far the shares travelled in 2026. The 52-week closing low was $76.20 on 10 April 2026, and the quoted 52-week intraday high was $235.54 on 30 October 2026. Much of that gain came before a report that slowed the growth outlook.
Catalysts ahead
- 1 December 2026: Chief executive and chief financial officer fireside chat at the 30th Annual UBS Global Technology and AI Conference, 8:15 a.m. Mountain Time. These are management's first public comments since the roughly 8% fourth-quarter billings guide; any change to that view, or more detail on federal deal timing, moves the case.
- ~5 February 2027 (est.): Fourth-quarter 2026 results and first fiscal 2027 guidance. Billings growth against the roughly 8% guide, and the 2027 revenue outlook, decide whether the slowdown reflects federal timing or a lasting trend.
What would change the view
A daily close above $230.29, the 29 October 2026 close and the highest of the 20 sessions before the report, would show the shares leading the S&P 500; so would fourth-quarter calculated current billings growth of 11% or more against the roughly 8% guide.
What it trades with
Qualys trades with vulnerability-management peers. In the third quarter of 2026, Tenable's revenue was $276.4 million, up 9.5%, and Rapid7's was $212.4 million, down 2.5%, according to their Form 8-K filings; both came in above their own guidance. The group also falls together on artificial-intelligence disruption news: on 25 March 2026, after Databricks launched its LakeWatch security platform, Qualys fell 4.9%, Rapid7 7.7% and Tenable 8%, per StockStory.
The November fall followed Qualys's own billings guide rather than a peer report. Federal contract timing ties Qualys's quarterly billings to US government spending cycles, which makes single quarters lumpy.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $188.0 million, up 11% from a year earlier; non-GAAP EPS was $2.12 and GAAP EPS $1.62; operating cash flow was $101.8 million. Qualys Form 8-K exhibit 99.1, third-quarter 2026 results · as of
- Fiscal 2026 revenue guidance was raised to $736.9–738.9 million from $732–738 million; fourth-quarter revenue guidance is $191.0–193.0 million, or 9%–10% growth. Qualys Form 8-K exhibit 99.1, third-quarter 2026 results · as of
- Third-quarter calculated current billings were $211.9 million, up 14%; management guided fourth-quarter billings growth to about 8% and full-year growth to 11%. Qualys Form 8-K exhibit 99.1; 9 November 2026 earnings call (Investing.com transcript) · as of
- Net dollar expansion was 105%, unchanged from the second quarter, and 108% for customers on ETM or CSAM, up from 107%. 9 November 2026 earnings call (Investing.com transcript) · as of
- JPMorgan (Neutral) cut its target to $215 from $241 and Jefferies (Hold) to $215; UBS (Neutral) raised to $210, Wedbush (Neutral) to $185 and Morgan Stanley (Underweight) to $140. Analyst-action headlines (Benzinga, MarketBeat), 10 November 2026 · as of
- Canaccord Genuity raised its target to $220 from $190, Baird to $210 from $160, RBC to $197 from $180 and Piper Sandler to $185 from $175. Analyst-action news items (Rallies.ai, Benzinga), 10 November 2026 · as of
- The chief financial officer sold 2,659 shares at an average $209.66 on 2 November 2026 under a Rule 10b5-1 plan; the chief executive sold 3,200 at an average $190.36 on 14 October 2026 under a plan. SEC Form 4 filings dated 15 October 2026 and 3 November 2026 · as of
- Tenable's third-quarter 2026 revenue was $276.4 million, up 9.5%, and Rapid7's was $212.4 million, down 2.5%; both beat their own guidance. Tenable and Rapid7 Form 8-K filings, third quarter 2026 · as of
Sources
- QUALYS, INC. - Form 8-K - FY2026 · sec.gov ·
- Earnings call transcript: Qualys beats Q3 2026 estimates but shares fall after hours · in.investing.com
- JPMorgan Chase & Co. Has Lowered Expectations for Qualys (NASDAQ:QLYS) Stock Price · marketbeat.com ·
- UBS's 30th annual technology and AI conference will feature Qualys' CEO and CFO. · stocktitan.net ·
- Qualys raises target price to $220 from $190 · rallies.ai
- Qualys, Inc.: Baird raises target price to $210 from $160 · rallies.ai
- Rapid7, Inc. - Form 8-K - FY2026 · sec.gov ·
- What Happened? · finance.yahoo.com ·
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