Qualys, Inc. Just Recorded A 6.8% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a mediocre week for Qualys, Inc. (NASDAQ:QLYS) shareholders, with the stock dropping 11% to US$170 in the week since its latest full-year results. Qualys reported US$554m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$4.03 beat expectations, being 6.8% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Qualys
Following the latest results, Qualys' 21 analysts are now forecasting revenues of US$608.4m in 2024. This would be a solid 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to sink 15% to US$3.51 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$617.5m and earnings per share (EPS) of US$3.77 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$167, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Qualys, with the most bullish analyst valuing it at US$220 and the most bearish at US$114 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Qualys' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.7% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Qualys is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$167, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Qualys. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Qualys analysts - going out to 2026, and you can see them free on our platform here.
We also provide an overview of the Qualys Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
