Qualys, Inc. (NASDAQ: QLYS)

Sector: Technology Industry: Software - Infrastructure CIK: 0001107843
Market Cap 4.80 Bn
P/B 9.06
P/E 25.37
P/S 7.35
ROIC (Qtr) 28.57
Div Yield % 0.00
Rev 1y % (Qtr) 10.41
Total Debt (Qtr) 54.61 Mn
Debt/Equity (Qtr) 0.10

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 281.46M provides robust 5.15x coverage of total debt 54.61M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 225.25M provide 30.67x coverage of short-term debt 7.34M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.02B provides 18.67x coverage of total debt 54.61M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 271.36M exceeds capital expenditure of 10.10M by 26.86x, indicating strong organic growth funding capability.
  • Long-term investments of 246.18M provide solid 5.21x coverage of long-term debt 47.26M, indicating strategic financial planning.

Bear case

  • Operating cash flow of 281.46M barely covers its investment activities of (109.24M), with a coverage ratio of -2.58, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (109.24M) provide weak support for R&D spending of 116.63M, which is -0.94x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 281.46M provides insufficient coverage of deferred revenue obligations of 387.81M, which is 0.73x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 281.46M shows concerning coverage of stock compensation expenses of 76.99M, with a 3.66 ratio indicating potential earnings quality issues.
  • Long-term investments of 246.18M represent a high 3.38x of fixed assets 72.75M, indicating potential overexposure to financial assets versus operational capabilities.

Geographical Breakdown of Revenue (2024)

Contract with Customer, Sales Channel Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,197.34 Bn 26.81 10.47 57.61 Bn
2 ORCL Oracle Corp 506.93 Bn 48.84 12.87 124.39 Bn
3 PLTR Palantir Technologies Inc. 341.64 Bn 311.89 87.69 0.24 Bn
4 PANW Palo Alto Networks Inc 118.39 Bn 105.97 12.39 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 109.19 Bn -347.56 23.92 0.82 Bn
6 SNPS Synopsys Inc 76.22 Bn 57.21 10.80 14.29 Bn
7 FTNT Fortinet, Inc. 62.40 Bn 33.30 9.52 1.00 Bn
8 NET Cloudflare, Inc. 60.91 Bn -591.17 30.25 3.50 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.36 2.36
EV to Cash from Ops. EV/CFO 15.99 6.76
EV to Debt EV to Debt 82.40 -7.44
EV to EBIT EV/EBIT 19.05 -6.97
EV to EBITDA EV/EBITDA 19.74 7.81
EV to Free Cash Flow [EV/FCF] EV/FCF 16.58 27.96
EV to Market Cap EV to Market Cap 0.97 0.43
EV to Revenue EV/Rev 6.89 32.94
Price to Book Value [P/B] P/B 8.76 3.89
Price to Earnings [P/E] P/E 24.52 -24.42
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.26
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.68
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 0.00 -11.97
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -25.97 -406.35
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -4.32 220.63
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 11.05 19.33
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 14.27 42.98
EBIT Growth (1y) % EBIT 1y % (Qtr) 16.04 13.70
EBT Growth (1y) % EBT 1y % (Qtr) 16.04 7.87
EPS Growth (1y) % EPS 1y % (Qtr) 12.31 68.92
FCF Growth (1y) % FCF 1y % (Qtr) 22.13 306.88
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.38 47.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.63 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.52 1.21
Current Ratio Curr Ratio (Qtr) 1.38 2.59
Debt to Equity Ratio Debt/Equity (Qtr) 0.10 -0.95
Interest Cover Ratio Int Coverage (Qtr) 0.00 -11.97
Times Interest Earned Times Interest Earned (Qtr) 0.00 -11.97
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 38.50 -550.34
EBIT Margin % EBIT Margin % (Qtr) 36.17 -242.82
EBT Margin % EBT Margin % (Qtr) 36.17 -608.89
Gross Margin % Gross Margin % (Qtr) 82.40 51.79
Net Profit Margin % Net Margin % (Qtr) 29.00 -611.54