Qualys Inc. Common Stock (QLYS)

FairStock Score: 82/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $259 million in annual free cash flow (8.7% yield on market cap)
• High return on equity of 38.2% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.09, providing financial flexibility
• FairStock composite score of 82/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($44) with negative 89% margin of safety—limited downside protection

AI Analysis

Qualys Inc. Common Stock is a small-cap technology company valued at $3.0 billion. The business generates $669 million in annual revenue with a 7.9% net margin and $259 million in free cash flow. From a quality standpoint, Qualys shows solid Piotroski F-Score of 6/9 and healthy Altman Z-Score of 3.7. On valuation, the stock is reasonably priced at 15.4x earnings, with trades above its Graham Number with a negative 89% margin. Growth dynamics show revenue growing at 10.1% and profit growth of 20.9%. Our composite FairStock Score of 82/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $259 million in annual free cash flow (8.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the technology space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer