Investment Thesis
Qualys demonstrates exceptional profitability with 82.9% gross margins and 34.7% operating margins, coupled with outstanding free cash flow generation at $93.6M (53.3% FCF margin). The zero-debt balance sheet and $279.5M cash position provide substantial financial flexibility, while 17% EPS growth outpacing 10.1% revenue growth indicates improving operational efficiency.
Strengths
- Industry-leading gross margin of 82.9% typical of premium SaaS
- Exceptional free cash flow conversion at 53.3% FCF margin with minimal capex
- Zero debt with $279.5M cash provides significant strategic flexibility
- Operating margin of 34.7% demonstrates strong operational leverage
- EPS growth of 17% YoY accelerating faster than revenue growth
Risks
- Moderate revenue growth of 10.1% YoY suggests maturity, potential market saturation
- Low ROE of 8.9% despite strong profitability indicates capital not being deployed efficiently
- Substantial retained earnings and cash position may signal underutilized growth capacity
- Minimal capex of $1.7M could indicate infrastructure underinvestment
- Data freshness at 2026-03-31 is 6+ weeks old, market conditions may have shifted
Key Metrics to Watch
- Quarterly revenue growth trajectory and guidance
- Free cash flow consistency and conversion ratio
- Capital deployment strategy and potential M&A activity
- Operating margin trajectory and operating expense growth rates
Financial Metrics
Revenue
175.6M
Net Income
50.6M
EPS (Diluted)
$1.42
Free Cash Flow
93.6M
Total Assets
1.1B
Cash
279.5M
Profitability Ratios
Gross Margin
82.9%
Operating Margin
34.7%
Net Margin
28.8%
ROE
8.9%
ROA
4.6%
FCF Margin
53.3%
Balance Sheet & Liquidity
Current Ratio
1.43x
Quick Ratio
1.43x
Debt/Equity
0.00x
Debt/Assets
47.9%
Interest Coverage
N/A
Long-term Debt
N/A
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-07T10:19:40.468194 |
Data as of: 2026-03-31 |
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