Qualys Earnings: Quality Firm Closes Another Strong Quarter Despite Macroeconomic Pressures

We are raising our fair value estimate for narrow-moat Qualys to $143 from $135 after the firm finished its third quarter with strong sales and profitability. Much like prior quarters, we were impressed with the firm’s emphasis on driving profitable growth as it navigates a tricky macroeconomic environment. We continue to view Qualys as well positioned to serve a variety of security needs faced by its clients, which are typically small and midsize businesses. With the firm expanding solutions beyond its core vulnerability management offering, we view this expansion positively and think that it will provide Qualys with more upselling/cross-selling opportunities in the future. The firm’s shares traded slightly down after-hours and we view them as fairly valued after our fair value estimate increase.