What Happened?
Shares of cloud security and compliance software provider Qualys (NASDAQ:QLYS) fell 7% in the pre-market session after the company reported weak fourth-quarter results. The company's 2025 revenue guidance indicates a slowdown, with projected growth of 6–8% compared to 10% in 2024. This reduced sales outlook dragged down full-year earnings projections, missing earlier targets. Yet billings climbed 13%, topping analyst forecasts and hinting at healthy customer demand, but the market reacted negatively to the softer guidance, leading to a decline in the stock.
The shares closed the day at $135.56, down 3.8% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Qualys? Access our full analysis report here, it’s free .
What The Market Is Telling Us
Qualys’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 20.6% on the news that the company reported a "beat and raise" quarter. Qualys results below past most of the key top-line metrics we track, including billings, EBITDA, and adjusted EPS. Adding to the good news is that revenue guidance for next quarter came in above expectations, and the company also raised full-year EPS guidance. The results suggest the company is doing a great job at meeting the needs of its customers, which should help drive strong customer retention and expansion.
The launch of Qualys' TruRisk Eliminate for security remediation and Qualys TotalAI solutions also demonstrate the company's focus on adding value to its customers.
Overall, this was a strong quarter for the company, demonstrating the company's strengths in the competitive security space.
Qualys is down 4.3% since the beginning of the year, and at $133 per share, it is trading 24.9% below its 52-week high of $177.17 from February 2024. Investors who bought $1,000 worth of Qualys’s shares 5 years ago would now be looking at an investment worth $1,502.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. .