Watch · 68/100 · medium confidence

QUALYS, INC. (QLYS) — Council Assessment

🟡 WATCH · Score 68/100 · medium confidence

A genuinely high-quality, net-cash SaaS compounder trading at a modest multiple, but decelerating growth and a stock sitting at its 52-week high blunt the margin of safety.

As of 2026-06-27. 18 lenses weighed in, 0 abstained. Sources: 6 filings, 15 news, 15 discussion, 1 earnings_call.

360 narrative — news & sentiment digest

QLYS Investment Briefing

Management Commentary (Earnings Call)

Revenue & Growth

FY2025: $669.1M revenue (+10% YoY); FY2026 guidance: $717–725M (+7–8%)
Q4 2025: $175.3M (+10% YoY); Q1 2026 guidance: $172.5–174.5M (+8–9%)
Current billing growth FY2025: 8% (vs. 9% in FY2024), suggesting modest baseline

Profitability & Capital Allocation

Adjusted EBITDA margin FY2025: 47%; FY2026 guidance: mid-40s
Free cash flow FY2025: $304.4M (45% of revenue); Q4 FCF margin: 43% (vs. 26% prior year)
EPS FY2025: $7.07 (+13%); FY2026 guidance: $7.17–$7.45
Share repurchases: $44.7M in Q4; total $1.2B since Feb 2018; new $200M authorization announced

Product & Channel Mix

Channel revenue now 51% of total (up from 48%), growing 17% vs. direct +4%
International revenue growth 15% (vs. domestic +6%); 44% of total revenue
New products gaining traction:
- Cybersecurity Asset Management + ETM: 13% of new bookings (vs. 9% prior year)
- Patch Management: 16% of new bookings (consistent)
- Total Cloud: 5% of bookings (up from 4%)

Net Dollar Retention & Expansion

Gross dollar retention: >90% but with "modest sequential decline" in Q4
Net dollar expansion (NDR): 103% (down from 104% in Q3)
Management guidance assumes no material change in NDR for 2026, anchoring 7–8% baseline growth

Key Strategic Narrative: AI-Powered Risk Operations Center (ROC) Management emphasized a paradigm shift from detection-only to end-to-end risk orchestration:

Agentic AI risk fabric: Continuously predict, quantify, prioritize, and remediate risk across multi-cloud and on-premises
Exploit confirmation: Actively validates exploitability (not just theoretical risk scores) via "safe exploit" workflows
Patch management leadership: Deployed 140M patches in 12 months; positioned as #1 in GigaOM analyst report
Vendor-neutral architecture: Ingests third-party data; orchestrates non-Qualys findings alongside native detections
Identity security integration: Added identity as part of "new AI perimeter"

Win Examples & Expansion Opportunities

Global 50 customer: Mid-six-figure annual bookings expansion via ETM + third-party data ingestion
Global 200 Latin America prospect: Seven-figure annual bookings win (multi-solution including Cloud CNAP)
Federal agencies: Mid-six-figure expansions; positioning for multi-agency ETM rollout ("significant observe opportunity")
QFlex pricing model (beta): Allows customers to accelerate ETM adoption; plan to move toward GA in 2026

Q&A Highlights

On QFlex & Adoption:

QFlex enables customers to progressively adopt capabilities (prioritization → confirmation → remediation) at their own pace; removes friction vs. "all-or-nothing" switch
Early feedback "very positive"; 2026 focus on GA expansion

On AI Agent Marketplace:

Agents (e.g., "Agent Val" for exploitation, "Agent Sarah" for patching) augment security teams and reduce remediation time
Differentiation vs. competitors: autonomous decision-making + remediation, not just detection + scoring
Management sees this as uplift and cross-sell lever from VMDR → ETM, competing against exposure-management-only solutions

On NDR & 2026 Guidance:

CFO Jumi Kammer: Baseline 103% NDR assumed; "no material change" anticipated based on current pipeline and customer conversations
Management acknowledges "significant upside potential" from ETM adoption, federal expansion, and partner-led business but not incorporated into 7–8% baseline
Early ETM POC conversion encouraging but "very early" to map confirmed trajectory; will provide ETM-specific metrics starting Q1 2026

On Patch Management Durability:

CEO Samantha Clark emphasized patch as majority of remediation value; criticized "dashboard tourism" of competitors
Recent innovation: "patchless patching" (applying mitigating controls instead of patches) expands flexibility
Differentiation: highly integrated with VM, not partnership-based; speed (minutes, not weeks) vs. manual workflows

On Competitive Landscape (ServiceNow–Armis Acquisition):

Management frames Armis as asset-inventory focused (passive discovery); lacks patch, lacks exploitation validation, cannot remediate at machine speed
Key quote (Samantha): "You cannot show up for the AI fight today with your Jira tickets and your ServiceNow tickets."
Positioned as validation of ROC thesis: competitors still in detection/scoring; Qualys moving to autonomous remediation

Recent Developments

Q4 2025 earnings call (2026-02-06): Full-year execution reported; FY2026 guidance issued
Partner ecosystem expansion: MROC (Managed Risk Operations Center) partner network growing; over a dozen certified partners launching services; partner-led deal registration increased in Q4
Federal business momentum: Authorized as shared security service for government agencies; FedRAMP certification opening 2026–2027 pipeline
QFlex beta ongoing: Strong customer response; planned GA transition in 2026
Identity security integration: Natively integrated into ETM platform

Bull Narrative

Strong product differentiation (per management): ETM's exploit confirmation + autonomous remediation + risk quantification positions Qualys uniquely vs. exposure-management-only competitors (crowdstrike, Tenable, ServiceNow-Armis). Analyst confirmation (GigaOM #1 in patch management) lends credibility.
Secular tailwinds in cyber-risk quantification: CFOs/CFRs increasingly demand security ROI linked to business impact; NDR at 103% and multi-solution expansion suggest customers value Qualys' end-to-end approach.
Underrated channel and federal upside: Channel grew 17% in Q4; partner motion still early (certifications, services rollout). Federal vertical acknowledged as "long-term growth opportunity" with FedRAMP creating 2026–2027 expansion potential.
Innovation velocity: Agentic AI, identity integration, QFlex flexibility address customer friction points (time-to-remediate, talent shortage). Management's tone on AI differentiation credible relative to recent Anthropic/LLM announcements.
Capital return + profitability: 47% EBITDA margin, 45% FCF margin, consistent buyback program ($1.2B returned; new $200M auth) suggest disciplined capital allocation and confidence in long-term cash generation.
Retail sentiment: Recent posts (late May–June 2026) predominantly bullish on technical breakout (above 105, heading to 126 area), option call buying activity ($130 7/17 calls).

Bear Narrative

Growth deceleration expected: 7–8% revenue guidance for 2026 vs. 10% FY2025. Management attributes to "low to mid single-digit growth in security spend" persisting; implies macro headwind or budget prioritization shift not easily overcome by product innovation alone.
NDR flattening, not expanding: 103% end-of-year, down from 104% in Q3. Management's explicit guidance of "no material change" suggests management is not confident in meaningful upsell from ETM or cross-sell momentum in near term. Early POCs "encouraging" but too early to drive NDR uplift.
ETM adoption still nascent: Despite 12+ months of ETM live, management provided zero concrete metrics on customer count, penetration rate, or bookings attribution. Commitment to disclosure "starting Q1 2026" signals lack of confidence in current trajectory.
Channel revenue flatness in net-dollar terms: While channel revenue grew 17%, direct revenue grew only 4%, and gross dollar retention slightly declined in Q4. Shift to channel (now 51%) may mask underlying churn or lower-ARPU customer acquisition.
Competitive intensity unresolved: ServiceNow-Armis acquisition, even if positioned as non-threatening, signals major incumbent (ServiceNow) entering cyber-risk market. Qualys' response ("they lack patch," "can't remediate fast") feels defensive.
Insider selling: Multiple Form 4 filings (June 2026) show Bruce Posey (CLO), Wendy Pfeiffer (director) selling shares under Rule 10b5-1 plans. While routine, timing coincides with stock reaching multi-year highs; may reflect optionality concerns.
Operating expense guidance ambiguous: Management plans "mid-teens increase in operating expenses" in 2026 while holding mid-40s EBITDA margin; implies ~800 bps of gross margin upside needed to absorb $100M+ spend increases on modest revenue growth. Execution risk.

Retail Sentiment

Bullish, moderate conviction.

Recent posts (May–June 2026) focus on technical breakout: "broke 105," "pushing 200d," "good look," "wow."
Options activity: call buyers active on $130 7/17 contracts (at $1.35–1.45 mid-June), suggesting near-term momentum bet rather than fundamental conviction.
Sentiment appears reactive to stock price action rather than ETM/ROC thesis adoption.
No counter-narrative observed in forums; limited discussion of guidance miss, growth deceleration, or insider selling.

Caveats

Transcription quality: Earnings call transcript is degraded (OCR artifacts, incomplete Q&A); some CEO remarks on AI agents, competitive positioning are paraphrased or fragmentary. Risk of misattribution.
Lack of concrete ETM metrics: Management declined to quantify ETM customer base, bookings contribution, or penetration rate. "Encouraging early adoption" is unverifiable. Disclosure promised for Q1 2026 earnings.
Third-party analyst coverage sparse: No recent analyst commentary on Q4 2025 results or FY2026 guidance in provided material. Press and retail chatter only.
Macro/security-spend assumptions opaque: Management cites "low to mid single-digit growth in security spend" as baseline assumption but does not cite Gartner, Forrester, or other IDC-type forecasts. Guidance may be conservative or tied to internal rep feedback only.
Federal business lumpy and uncertain: Two mid-six-figure expansions cited; FedRAMP "opportunity" mentioned but unquantified. Federal is often multi-year sales cycle; 2026 pipeline visibility limited.
NDR language soft: "No material change" could mean 101–105% vs. 103% baseline; small moves have outsized impact on mid-teens growth profile.
Insider selling not contextualized: Sales by Posey/Pfeiffer under pre-established 10b5-1 plans; routine for executives. However, timing (stock near YTD highs) may reflect lack of visibility or confidence in near-term catalysts.

Summary

Qualys is executing defensively: strong profitability, solid Q4 revenue, channel diversification, and real innovation (agentic AI, exploit confirmation, remediation automation) positioning it as differentiated in cyber-risk operations. However, growth trajectory is moderating (7–8% guidance), NDR is flatlining (103%, no expected improvement), and ETM adoption—the core upside thesis—remains unproven at scale. Management's candor on "no material change in NDR" and commitment to disclose ETM metrics later (Q1 2026) suggest near-term visibility is limited. Retail enthusiasm appears technical/sentiment-driven rather than fundamental. Valuation and risk/reward not assessable from provided material, but upside may require ETM inflection that is not yet visible in guidance.

Bull case

QLYS is a textbook quality franchise: 31% ROIC, 45% FCF margins, near-zero capex ($5M on $669M revenue), a net-cash balance sheet, and >90% gross dollar retention. Cash conversion exceeds GAAP earnings (OCF $309M vs NI $198M), confirming clean accounting per the forensic reviewer. Quality lenses (Akre 78, Munger 78, Terry Smith 78, Mauboussin 74, Greenwald 74) and the valuation referee (78) converge on a business earning a ~2,400bps ROIC-WACC spread priced at just 14.3x FCF / 22x earnings. The DCF pegs base intrinsic value at $267 (bear $204), and disciplined buybacks ($1.2B since 2018, new $200M auth) at these levels are accretive. The Christensen referee argues AI is a tailwind, not a threat, given the proprietary sensor-telemetry moat.

Bear case

The growth engine is stalling: revenue guidance decelerates to 7-8% from 10%, NDR is flat at 103% (down from 104%) with management explicitly guiding 'no material change,' gross dollar retention showed a modest sequential decline, and EPS guidance implies only 1-5% growth. The ETM/AI reacceleration thesis — the linchpin of the upside — remains completely unquantified after 12+ months live, with metrics deferred to Q1 2026. Opex is guided up mid-teens on 7-8% revenue growth, threatening margin compression. The seductive DCF is 82% terminal-value dependent, and Greenwald's EPV pegs no-growth value at only ~$73-74/share — meaning the current $123 price already embeds meaningful growth. The stock sits at its 52-week high after a ~65% rally off May lows, so the contrarian entry has passed. Hyperscaler bundling (Microsoft, CrowdStrike) is a real, under-addressed threat.

Dissent — where the council disagrees

The split is between the quality/valuation camp (Akre, Munger, Smith, Mauboussin, Damodaran referee ~74-78, all citing 14x FCF for a 31% ROIC franchise) and the growth/value/timing camp who all landed at Watch or lower. Schloss (AVOID 22) is the sharpest dissent: 7.74x book, stock at its exact 52-week high, zero asset-based floor. Greenwald — himself a quality investor — is the most damaging swing vote: his EPV of $73-74 says the stock trades at 1.7x conservative intrinsic value and the entire premium rests on growth that is decelerating. Druckenmiller, Lynch, Klarman, Graham and Fisher (all ~52-58) independently flag the same thing: the second derivative is negative, PEG is 2.0, and the DCF's 11% FCF-growth assumption exceeds management's own 7-8% guidance. This matters because the bulls' cheapness argument is a mirror of the bears' growth argument — the multiple looks cheap ONLY if growth holds, and the near-term evidence says it's fading. The unfalsified ETM thesis is the crux; nobody can underwrite it.

Key risks

Growth deceleration (7-8% guided vs 10% prior) with flat NDR at 103% and modest gross-retention decline signals a maturing franchise
ETM/AI adoption entirely unquantified after 12+ months — the core reacceleration thesis is unverifiable until Q1 2026
DCF is 82% terminal-value dependent; Greenwald's no-growth EPV of ~$73-74 sits far below the $123 price
Mid-teens opex growth on 7-8% revenue growth threatens margin compression
Hyperscaler bundling risk (Microsoft Defender/Security Copilot, CrowdStrike) could commoditize standalone VM — a threat management deflects
Stock at 52-week high after ~65% rally; sentiment now momentum-driven, no margin of safety on positioning

Catalysts

Q1 2026 earnings disclosure of ETM adoption/penetration metrics — the key falsifiable event
NDR re-accelerating above 105% or new-logo/channel growth driven by ROC differentiation
Continued accretive buybacks under the new $200M authorization
QFlex GA and federal multi-agency ETM rollout converting pipeline to bookings

DCF valuation (finance-expert model)

two-stage DCF, Gordon terminal value, CAPM-weighted WACC.

Intrinsic value: $267.25/share vs price $123.27 → +117% (bear $204.36 · base $267.25 · bull $300.26).

Step	Value
Base free cash flow	$304M
FCF growth (yrs 1-5)	11.0% (revenue CAGR)
WACC (β 0.609)	7.3%
Terminal growth	2.5%
PV of explicit FCF	$1.7B
PV of terminal (residual) value	$7.6B (82% of EV)
Enterprise value	$9.3B
less Net debt	$-250M
= Equity value	$9.5B
/ Shares (36M) = intrinsic/share	$267.25

⚠️ intrinsic value diverges >100% from price — treat as indicative; check FCF normalization (lumpy/one-off cash flows)

Short-sell evaluation

🚫 AVOID SHORTING

Despite decelerating growth, a stretched valuation, and a stock at its 52-week high, QLYS is a poor short candidate. The forensic short-seller lens returns a clean bill of health — cash flow exceeds earnings across all five years, capex is negligible, accruals are negative, there is no leverage, and no accounting red flags. Shorting a net-cash, 45%-FCF-margin, 31%-ROIC franchise with ongoing buyback support and a genuine moat exposes you to squeeze and quality risk while the fundamentals, though decelerating, are not deteriorating in absolute terms. The valuation is full on an EPV basis but not egregious at 14x FCF, and any ETM inflection at Q1 2026 could trigger a violent re-rate against the short. This is a business to avoid shorting.

Pros (the short could work)

Growth decelerating to 7-8% with flat NDR (103%) and modest gross-retention erosion — momentum is the wrong direction
Greenwald EPV of ~$73-74 implies ~40% downside if growth fails to materialize; stock at 1.7x conservative fair value
Stock at 52-week high after 65% rally — extended and priced for a growth story not yet visible in the numbers
ETM thesis unquantified; a disappointing Q1 2026 metric could puncture the narrative
Margin compression risk from mid-teens opex growth on single-digit revenue growth
Hyperscaler bundling could structurally shrink the addressable market over time

Cons (what kills the short)

Fortress balance sheet: net cash ~$250M, no debt, 45% FCF margin — no financial distress or catalyst for collapse
Clean forensics: OCF exceeds NI every year, negative accruals, minimal capex — no accounting short trigger
Genuine moat (proprietary sensor telemetry, >90% gross retention, switching costs) with AI as a tailwind per Christensen lens
Ongoing accretive buybacks ($200M new authorization) provide price support on a $4.3B cap
Reasonable 14x FCF multiple leaves little valuation air to short into; not a bubble
Positive price momentum and low beta (0.61); ETM inflection risk creates asymmetric squeeze exposure against the short

Council scorecard

Lens	School	Stance	Score	Conf
Chuck Akre	quality	🟢 pass	78	high
Valuation Referee (Damodaran-style)	referee	🟢 pass	78	medium
Joel Greenblatt	value	🟢 pass	78	high
Charlie Munger	quality	🟢 pass	78	medium
Terry Smith (Fundsmith)	quality	🟢 pass	78	high
Warren Buffett	quality	🟢 pass	75	medium
Bruce Greenwald	value	🟢 pass	74	medium
Michael Mauboussin	quality	🟢 pass	74	medium
Ray Dalio	risk	🟢 pass	72	medium
Forensic Short-Seller (Chanos/Einhorn-style)	referee	🟢 pass	72	medium
AI & Disruption Referee (Christensen-style)	referee	🟢 pass	72	medium
Philip Fisher	growth	🟡 watch	58	medium
Howard Marks	risk	🟡 watch	55	medium
Stanley Druckenmiller	risk	🟡 watch	52	medium
Benjamin Graham	value	🟡 watch	52	high
Seth Klarman	value	🟡 watch	52	medium
Peter Lynch	growth	🟡 watch	52	medium
Walter Schloss	value	🔴 avoid	22	high

Member reasoning

Chuck Akre — 🟢 pass · 78/100 · high confidence

Qualys is a textbook Akre-style compounding machine: capital-light, subscription SaaS with genuinely exceptional FCF conversion, high and unlevered returns on capital, and a durable competitive moat in enterprise vulnerability management. The three-legged stool analysis: (1) Extraordinary business — 33% operating margins, 45% FCF margins, ROIC of 31.25% and ROE of 35.3% achieved with essentially zero financial leverage (debt_to_equity is null/negligible, net cash position of $250M), capex of only $5M on $669M revenue — this is as capital-light as it gets in software. (2) Management skill and integrity — FCF compounding from $176M (2021) to $304M (2025), $1.2B returned to shareholders since 2018 with buybacks that have been consistent and meaningful (new $200M authorization), candid disclosure on NDR deceleration and ETM maturity. The insider selling is predominantly routine 10b5-1 plan activity (CLO, director), small dollar amounts (~$150K combined), and should not be weighted heavily. (3) Reinvestment runway — this is the key uncertainty: 7–8% guidance implies growth is moderating. However, cybersecurity TAM remains large and underpenetrated, the ETM/AI risk operations platform is a legitimate new product layer (channel grew 17%, international grew 15%), and Qualys has not historically been a heavy M&A acquirer so the cash is deployed primarily via buybacks. FCF per share has compounded well: $176M FCF on ~42M shares (est. 2021) vs. $304M on ~35.7M shares today = per-share FCF roughly doubled in 4 years, a strong compounding result. Valuation: P/FCF of 14.3x is attractive for a business of this quality, and the DCF intrinsic value of $267/share vs. $123 current price implies ~117% upside — even the bear case DCF is $204, still 66% above market. At 14x FCF for a business generating 45% FCF margins with ROIC of 31% and a net cash balance sheet, this is not overvalued. The PEG of 2.0 is higher but reflects the P/E (not FCF), and FCF-based multiples are more appropriate here. The single most important risk to the Akre thesis is the reinvestment runway question: if growth truly stagnates at 7–8% and ETM fails to inflect, the compounding rate slows. But the FCF yield (~7% at current price) provides a floor even in a slow-growth scenario, and buybacks at these prices are accretive. Net: all three legs are present, the moat is genuine, management has demonstrated disciplined capital allocation, and the price is reasonable-to-cheap for the quality.

Key points

ROIC 31.25% and ROE 35.3% with zero meaningful leverage — genuine business economics, not financial engineering
FCF margins of 45% on $669M revenue; capex only $5M — extreme capital-light model
FCF per share has roughly doubled 2021–2025 via earnings growth + share count reduction from ~42M to ~35.7M
P/FCF of 14.3x is cheap for a 30%+ ROIC, net-cash SaaS franchise; DCF base case $267 vs. $123 stock price
$1.2B returned via buybacks since 2018 plus new $200M auth — disciplined, per-share-accretive capital allocation
Cybersecurity TAM large and secular; ETM/AI risk operations center = credible reinvestment runway beyond core VM
Channel grew 17% and international grew 15% in 2025 — geographic and channel diversification broadening the moat
Subscription model with >90% gross dollar retention provides recurring cash flow visibility

Red flags

Revenue growth guiding to 7–8% in 2026 vs. 10% in 2025 — reinvestment runway leg is the key uncertainty
NDR at 103% and management explicitly guiding 'no material change' — upsell/cross-sell not yet inflecting
ETM adoption metrics withheld from 2025 disclosures; promised for Q1 2026 — lack of transparency on core growth driver
Gross dollar retention showed modest sequential decline in Q4 2025 — early sign of churn pressure
Operating expense guided up mid-teens in 2026 on 7–8% revenue growth — margin compression risk if ETM revenue doesn't arrive
DCF heavily (82%) dependent on terminal value — small changes in long-run growth assumptions drive large swings in intrinsic value

Valuation Referee (Damodaran-style) — 🟢 pass · 78/100 · medium confidence

QLYS presents a compelling valuation case from a Damodaran-style DCF perspective. The model's base intrinsic value of $267.25/share implies 117% upside versus the current price of $123.27 — a substantial margin of safety. Even the bear-case sensitivity ($204.36) sits 66% above today's price, meaning the investment thesis does not require optimistic assumptions to work. Let me stress-test the DCF assumptions: (1) WACC of 7.34% using beta of 0.609 is defensible — QLYS is a mature, subscription-SaaS security company with low leverage and a low-beta profile; this is not artificially suppressed. (2) FCF growth assumption of ~11% (revenue CAGR) is conservative relative to the 45% FCF margin the company achieved in FY2025 — in fact, QLYS grew FCF from $176M in 2021 to $304M in 2025, a CAGR of ~14.6%, so using 11% as the projection actually understates historical FCF growth. (3) Terminal growth of 2.5% sits at or slightly above long-run nominal GDP — marginally aggressive but within the range of a company in a structurally growing cybersecurity market with recurring subscription revenue. The biggest caveat in the DCF is that 81.9% of enterprise value resides in the terminal value, which is high and means the quality of the terminal assumptions matters enormously. However, a 2.5% terminal growth rate is not heroic for a cloud-delivered subscription security company. On the reverse-engineering side: at $123.27, the market is implying either a much higher discount rate (~12%+), much lower perpetual growth (<1%), or a collapse in FCF margins. None of these implied expectations are well-supported by the facts. FCF margins have been 38–45% consistently for four years. The business generates ROIC of 31.25% against a WACC of ~7.3% — an extraordinary spread that validates growth as value-creating rather than value-destructive. Sales-to-capital ratio is also excellent: capex is minimal ($5M) because this is a cloud-native SaaS business; working capital is managed tightly. Revenue grows primarily from renewals and upsell on an asset-light infrastructure. The story-to-numbers connection is coherent: subscription security software with >90% gross dollar retention, platform expansion through ETM/patch/CAASM, and agentic AI uplift as an emerging lever. This is not a narrative-only story; the numbers show consistent margin expansion, FCF growth, and ROIC well above cost of capital over multiple years. The key risks that lower confidence from high to medium: (a) revenue growth is decelerating to 7-8% guidance for FY2026 — if this becomes the permanent growth rate, FCF growth at 11% requires margin expansion that management guides only to 'mid-40s' (implying no expansion), which would compress the DCF; (b) 81.9% terminal value concentration means a modest rise in long-run WACC assumptions (to 8.5-9%) would erode the intrinsic value materially; (c) NDR at 103% and flatlining suggests limited organic expansion momentum — the growth thesis partly depends on ETM/ROC adoption not yet reflected in numbers. The P/FCF of 14.26x is strikingly low for a high-quality SaaS business with 45% FCF margins and 31% ROIC — this alone signals undervaluation relative to peers. PE of 21.9x on a company with this profitability profile is also inexpensive. The DCF conclusion is supported across methodologies. Overall: QLYS passes on valuation discipline grounds with a genuine margin of safety under conservative assumptions.

Key points

DCF intrinsic value of $267.25/share implies 117% upside; bear case of $204.36 still implies 66% upside — margin of safety is real, not dependent on optimistic inputs
WACC of 7.34% is defensible for a low-beta (0.609), debt-light, mature SaaS company; not artificially suppressed
FCF growth assumption of 11% is actually conservative vs. realized 4-year FCF CAGR of ~14.6% ($176M→$304M)
ROIC of 31.25% vs. WACC ~7.3% = 24 percentage-point spread confirms growth is value-creating, not value-destructive
Minimal reinvestment required ($5M capex on $304M FCF) — consistent with cloud-native SaaS asset-light model; sales-to-capital ratio excellent
P/FCF of 14.26x and P/E of 21.9x are strikingly low for a 45% FCF-margin, 33% operating-margin business with >90% gross dollar retention
Terminal growth of 2.5% is slightly above risk-free rate but defensible in secular-growth cybersecurity market; terminal value concentration at 81.9% is the key risk

Red flags

Terminal value is 81.9% of enterprise value — sensitivity to perpetual growth rate and terminal WACC assumptions is high; a 150bps WACC increase materially erodes intrinsic value
Revenue growth decelerating to 7–8% guidance for FY2026 — if FCF margins do not expand (management guides mid-40s, flat to slightly down), FCF growth of 11% requires assumption of some margin improvement not currently guided
NDR flatlining at 103% (down from 104%) with management signaling 'no material change' — organic expansion is weak; growth depends on new bookings and ETM adoption that is not yet quantified
ETM/ROC adoption provides no verifiable numerical signal yet; management deferred disclosure to Q1 2026 — DCF terminal growth partially relies on this optionality remaining unpriced
Insider selling (CLO, director) under 10b5-1 plans near YTD highs is routine but coincides with stock at 52-week highs — worth monitoring for further Form 4 activity

Joel Greenblatt — 🟢 pass · 78/100 · high confidence

Qualys screens well on both Greenblatt Magic Formula axes. On ROIC, the business is a cloud-native SaaS security platform with extremely low tangible capital intensity: net fixed assets are de minimis (capex FY2025 only $5.0M), and the subscription model generates strongly negative net working capital once deferred revenue is considered. EBIT of $222M on a tangible capital base that is essentially nominal produces astronomical ROIC by Greenblatt's NWC+fixed-assets denominator — comfortably north of 100%. On earnings yield, EV = $4,341M market cap + ~$0 net debt (cash of $250M exceeds any debt indicated by the near-zero debt-to-equity and clean balance sheet) = EV roughly $4,091M. EBIT/EV = $222M / $4,091M ≈ 5.4%, or an earnings yield of roughly 5.4%. That is not screaming cheap by Magic Formula standards, but is respectable for a high-quality franchise. The combination — extraordinary ROIC quality + moderate but real earnings yield — is precisely what Greenblatt rewards: a good business at a fair price. FCF conversion is superb: $304M FCF on $222M EBIT confirms no accrual manipulation; EBIT understates cash earnings because capex ($5M) is far below D&A. The DCF base case implies $267/share intrinsic value vs. $123 current price — a 117% upside — though the DCF is heavily terminal-value dependent (82% residual). The P/FCF of 14.3x is a more conservative but still attractive Greenblatt-style sanity check. Revenue CAGR of ~11% over 3 years with 33% operating margins and 45% FCF margins signals durable, capital-light economics. No special situation catalyst, but the Magic Formula combination alone justifies a pass verdict. Key risks: earnings yield is not deep-value territory (5.4% EBIT/EV), and 7-8% FY2026 growth guidance moderates enthusiasm. No balance sheet stress; insider selling is pre-planned 10b5-1 and immaterial in dollar terms.

Key points

ROIC by Greenblatt tangible-capital denominator (NWC + net fixed assets) is extremely high — capex of only $5M annually and a subscription model with deferred revenue compress the denominator to near-zero, producing triple-digit ROIC
EBIT/EV earnings yield ~5.4% ($222M EBIT / ~$4.1B EV with net cash of $250M): not deep-value cheap but acceptable for a franchise-quality business — the Magic Formula rewards the combination, not earnings yield alone
FCF of $304M vs. EBIT of $222M confirms clean, conservative accounting — operating cash converts better than EBIT, no accrual inflation
P/FCF of 14.3x is the most Greenblatt-friendly absolute valuation metric and is notably undemanding for a 33% operating margin, >45% FCF margin SaaS business
Capital-light, asset-minimal business model: $5M capex on $669M revenue; SaaS subscription base provides recurring, predictable EBIT
Net cash balance sheet ($250M cash, debt-to-equity not reported but implied negligible): EV is essentially market cap minus cash, no debt overhang distorting earnings yield
Revenue CAGR 11% (3yr), net margin 29.6%, ROE 35%, ROIC 31% (accounting basis per filings) — all confirm enduring business quality
DCF base intrinsic value $267/share vs. $123 price: even applying significant haircut to terminal value assumptions, bear case $204/share still implies ~66% upside

Red flags

Earnings yield of ~5.4% EBIT/EV is not in the top decile of Magic Formula screens; a deeper-value investor would want 8-10%+ yield — this is a fair-price-for-quality scenario, not a bargain-price scenario
Revenue growth decelerating to 7-8% FY2026 guidance from 10% FY2025, which could compress future EBIT and erode the quality component of the formula over time
NDR declining marginally (103%, down from 104%) and management guiding 'no material change' — limited near-term upsell momentum constrains EBIT growth
No special-situation catalyst (no spinoff, restructuring, or forced-selling dynamic): Greenblatt's highest-conviction situations involve a specific mispricing event, absent here
ETM/AI product upside is unquantified and management has deferred disclosure to Q1 2026 — the incremental EBIT from new products is unverifiable, making EBIT normalization slightly uncertain
Insider selling (Posey CLO, director Pfeiffer) under 10b5-1 plans at stock near YTD highs — routine but worth noting; management not buying
DCF is 82% terminal-value dependent, meaning the large implied upside is sensitive to long-run growth and WACC assumptions rather than near-term cash generation

Charlie Munger — 🟢 pass · 78/100 · medium confidence

Qualys is a high-quality cybersecurity SaaS business with characteristics that map well to Munger's quality lens. The core franchise — cloud-based vulnerability management and risk operations — is genuinely understandable: subscription-based security software with high switching costs, a large installed base of enterprise customers, and a technically differentiated platform. ROIC of 31.25% and ROE of 35.34% are well above the 15% quality threshold and have been sustained across multiple years. FCF margins of 45% in FY2025 (and consistently 38-45% across the five-year history) confirm that earnings are real — cash backs the income statement dollar-for-dollar and then some. Net income of $198.3M vs. FCF of $304.4M actually shows GAAP understates owner earnings, a hallmark of a quality business. The balance sheet is clean: net cash position ($250M cash, debt-to-equity not reported but total liabilities of $534M vs. $561M equity suggests manageable leverage), current ratio of 1.41, and minimal capex ($5M on $669M revenue — a near-pure-software model). Management has returned $1.2B via buybacks since 2018 and added a new $200M authorization, demonstrating owner-minded capital allocation. Revenue has compounded at ~10.96% CAGR over three years from a durable recurring revenue base. The DCF suggests the stock trades at roughly $123 vs. a bear-case intrinsic value of $204, implying meaningful margin of safety even under conservative assumptions. P/FCF of 14.26x is genuinely modest for a business with 45% FCF margins and 31% ROIC — this is not a stretched valuation. The moat is real though not impenetrable: vulnerability management has high switching costs (deep integration into customer security workflows, large datasets of customer asset inventories), and Qualys has maintained gross dollar retention above 90% for years. The emerging ETM/ROC platform extends the moat by moving from point-in-time scanning to continuous risk orchestration and remediation — a defensible direction. Competitive positioning vs. ServiceNow-Armis and Tenable appears credible based on management's differentiated capability in patch execution (140M patches deployed) and exploit confirmation. However, several Munger-style cautions apply: growth is decelerating to 7-8% (from 10%), which limits the reinvestment compounding story. NDR at 103% and declining slightly suggests the expansion engine is not accelerating. ETM adoption — the key thesis for re-acceleration — is unproven at scale with no concrete metrics disclosed. The business remains heavily dependent on the core VMDR franchise for near-term cash flows. The cybersecurity landscape is competitive and fast-moving, which sits on the edge of Munger's circle of competence given technology risk. Insider selling under 10b5-1 plans is routine but noted. Overall, this is a high-quality business at a fair-to-attractive price with a real moat, exceptional cash generation, clean accounting, and rational capital allocation — characteristics Munger explicitly rewards. The lack of near-term growth catalysts and modest deceleration prevent a higher score, but the inversion test passes: no obvious path to permanent capital impairment given the recurring revenue base, net cash, and essential security function.

Key points

ROIC 31.25% and ROE 35.34% — well above the 15% quality threshold, sustained over multiple years
FCF margin 45.49% in FY2025; FCF of $304M exceeds GAAP net income of $198M, confirming earnings quality
Near-zero capex ($5M on $669M revenue) — pure-software economics with high incremental returns
P/FCF of 14.26x is genuinely modest for a 45% FCF margin, 31% ROIC business; DCF bear case implies ~66% upside
$1.2B in buybacks since 2018 plus new $200M authorization — owner-minded, rational capital allocation
Net cash position; clean balance sheet with no fragility risk
Switching costs moat: deep integration into enterprise security workflows, 90%+ gross dollar retention
Revenue CAGR 10.96% over three years on a recurring subscription base — compounding albeit decelerating

Red flags

Revenue growth decelerating to 7-8% FY2026 guidance vs. 10% in FY2025 — reduces reinvestment compounding opportunity
NDR at 103% and declining (from 104% Q3), with management guiding no material improvement — expansion engine not accelerating
ETM adoption (the re-acceleration thesis) entirely unquantified — no customer count, penetration rate, or bookings contribution disclosed after 12+ months live
Cybersecurity technology risk: fast-moving competitive landscape (ServiceNow-Armis, CrowdStrike, Tenable) sits at edge of Munger circle of competence
Insider selling by CLO and director under 10b5-1 plans at near YTD highs — routine but coincident with limited near-term catalyst visibility
Operating expense guided to grow mid-teens in FY2026 while revenue grows 7-8% — margin compression risk if ETM monetization disappoints

Terry Smith (Fundsmith) — 🟢 pass · 78/100 · high confidence

Qualys is a textbook quality business by Fundsmith criteria: asset-light, subscription-based cybersecurity SaaS with consistently high returns on capital, exceptional free cash flow conversion, and durable recurring revenue. ROIC of 31.25% and ROE of 35.3% are well above cost of capital. FCF margin of 45.5% in FY2025 — up from 42.9% in 2021 — demonstrates not just conversion quality but improving cash economics. Capex is negligible at $5M on $669M revenue (0.75% of sales), the quintessential asset-light model Smith prizes. Net income of $198M converts to $304M FCF, meaning cash conversion exceeds 150% — unusual and a strong moat signal, likely reflecting deferred revenue dynamics in a subscription model. Operating margin of 33.2% is high and stable. The balance sheet is clean: net cash positive ($250M cash, no significant debt disclosed), consistent with Smith's disdain for leverage. On valuation, the stock trades at 14.3x price-to-FCF — a genuinely reasonable multiple for a business of this quality. The DCF intrinsic value of $267 (base case) vs. $123 current price implies ~117% upside, even applying a sceptical discount to the terminal value-heavy model. Even the bear case DCF of $204 represents 66% upside. The FCF yield implied at current price is ~7% ($304M FCF / $4.34B market cap), which is attractive for a franchise of this quality. Growth is the one blemish: revenue CAGR of ~11% over 3 years decelerating to 7-8% guidance. Smith does not require hypergrowth, but he needs confidence that reinvestment generates high incremental returns and the moat is intact. Qualys scores well here: switching costs in vulnerability management are real (deep OS/agent integrations, workflow dependency), recurring revenues are >90% gross-retained, and the new ETM/AI product layer represents a credible upsell motion — though still early. Insider selling is under pre-established 10b5-1 plans and amounts (CLO: $94K, director: $55K) are immaterial relative to market cap. No serial acquisition history, no goodwill-heavy balance sheet, no GAAP/non-GAAP divergence concerns. The modest deceleration in NDR (104% to 103%) and conservative 2026 guidance are worth monitoring but do not break the quality thesis.

Key points

ROIC 31.25% and ROE 35.3% — sustained well above cost of capital, meeting Smith's primary test
FCF margin 45.5% (FY2025), FCF of $304M exceeds net income of $198M — exceptional cash conversion signal
Capex $5M on $669M revenue (0.75%) — near-perfectly asset-light model
Net cash balance sheet, no meaningful debt — no leverage risk
Price-to-FCF of 14.3x implies ~7% FCF yield; DCF bear case ($204) still 66% above current price
Subscription model with >90% gross dollar retention, deep IT integrations = real switching costs and recurring demand
Revenue CAGR ~11% (3yr) with operating margin stability — no margin erosion, moat appears intact
ETM/agentic AI represents credible reinvestment runway with high incremental return potential

Red flags

Revenue growth decelerating to 7-8% guidance for FY2026 — may limit compounding if sustained
NDR declining modestly (104% → 103%) with management guiding 'no material change' — expansion less visible near-term
ETM adoption metrics undisclosed; management committing to Q1 2026 disclosure signals limited near-term confidence
DCF is heavily terminal-value dependent (82% of EV from terminal) — intrinsic value sensitive to long-run growth assumptions
Insider selling (CLO, director) under 10b5-1 plans at multi-year highs — routine but worth noting

Warren Buffett — 🟢 pass · 75/100 · medium confidence

Qualys presents several characteristics I look for in a quality business: exceptionally high free cash flow conversion (45% FCF margin on $669M revenue), high and consistent ROIC (31%) and ROE (35%) achieved without meaningful leverage (debt-to-equity effectively near zero given net cash position of ~$250M), and a durable switching-cost moat in enterprise cybersecurity vulnerability management. The business converts profits into real cash — FCF of $304M against net income of $198M, meaning D&A and working capital dynamics amplify rather than drain cash. Owner earnings are genuine. The SaaS subscription model creates predictable, recurring revenue with gross dollar retention above 90%. The 5-year revenue history shows consistent compounding: $411M→$669M over four years (~11% CAGR), and net margins have expanded from 17% to 30%. This is a business that earns high returns on incremental capital and doesn't need heavy reinvestment to sustain them — capex of only $5M against $304M FCF is remarkable capital-lightness. On valuation, the DCF suggests ~$267/share intrinsic value vs. $123 current price — a substantial margin of safety even under conservative assumptions. The P/FCF of 14x and P/E of 22x for a 30%+ ROIC business with recurring revenue are genuinely attractive, not stretched. However, I temper enthusiasm for several reasons: First, this is software — specifically enterprise security software — which requires ongoing R&D investment and faces rapid competitive evolution (ServiceNow-Armis, CrowdStrike, Tenable). The moat is real but not as permanent or easily understandable as a See's Candies or Coca-Cola. Second, growth is decelerating to 7-8% with NDR flatlining at 103% — a quality business, but the incremental growth story depends on unproven ETM adoption. Third, the technology cycle risk means I cannot forecast with high confidence what Qualys's competitive position looks like in decade two. I can see the current castle clearly; the moat's durability against AI-native competitors is harder to assess. Fourth, insider selling at multi-year highs under 10b5-1 plans is not alarming individually but clusters somewhat. The capital allocation is disciplined — $1.2B in buybacks, conservative balance sheet, no debt-funded empire building — and management earns marks for candor on NDR and growth guidance. This is a business Charlie and I could understand well enough to own, at a price that offers real margin of safety if the moat holds.

Key points

FCF margin of 45% ($304M) with capex of only $5M — genuinely capital-light owner earnings, not an accounting fiction
ROIC of 31% and ROE of 35% sustained WITHOUT leverage; net cash position ~$250M; debt-to-equity not reportable (no material debt)
Recurring SaaS revenue with >90% gross dollar retention creates Buffett-style predictable earnings stream
Revenue CAGR ~11% over 4 years with net margin expansion from 17% to 30% — compounding quality improving over time
DCF intrinsic value ~$267/share vs. $123 price implies ~117% upside; bear case $204 still 66% above current price — genuine margin of safety
P/FCF of 14x for a 31% ROIC business is the kind of price I like — a wonderful business at a fair price
Share buybacks $1.2B since 2018 + new $200M authorization; conservative balance sheet with no meaningful debt — rational capital allocation
Channel revenue growing 17% and international 15% suggest geographic and distribution diversification building

Red flags

Technology moat harder to assess for decade-long durability vs. consumer brand moats I'm most comfortable with — circle of competence concern
Revenue growth decelerating to 7-8% guidance with NDR flatlining at 103%; ETM adoption unproven at scale — growth story partially speculative
Competitive intensity increasing: ServiceNow-Armis combination signals large incumbents entering the market with bundling power
ETM metrics not yet disclosed despite 12+ months live — management transparency gap on the core upside thesis
Insider selling by CLO and director at multi-year highs (June 2026), though under pre-established 10b5-1 plans
DCF is heavily terminal-value dependent (82% of value in terminal) — requires sustained competitive position for 10+ years to validate
Mid-teens opex increase planned for 2026 while revenue grows only 7-8% — execution risk on maintaining mid-40s EBITDA margin

Bruce Greenwald — 🟢 pass · 74/100 · medium confidence

Qualys is a mature SaaS cybersecurity company with a genuine operating history and stable financials — directly in my wheelhouse. My EPV analysis begins with FY2025 operating income of $221.95M. Adjusting for the minimal capex ($5.0M vs. operating cash flow of $309.4M), the business is essentially all-intangible with negligible maintenance capex drag. Using a normalized operating margin around the 33% reported (which has been fairly stable across 2021–2025 as revenue grew from $411M to $669M), I derive NOPAT at roughly $221.95M × (1 – ~0.21 effective tax rate implied by $198.3M net income on $221.95M op income) ≈ $175M. Capitalizing at WACC of 7.34% gives EPV ≈ $175M / 0.0734 ≈ $2.38B enterprise value. Adding net cash of ~$250M yields equity EPV ≈ $2.63B, or roughly $73–74 per share on 35.7M shares. At current price of $123.27, the market is paying approximately 1.7× my EPV estimate — meaning the market is pricing in substantial growth. The margin-of-safety test fails on EPV alone. HOWEVER, the moat analysis materially changes the picture. EPV >> asset reproduction value signals a genuine franchise. Qualys' asset base (total assets $1.095B, stockholders equity $561M) is mostly intangible — the reproduction cost of rebuilding its VM/VMDR installed base, FedRAMP certifications, 10,000+ customer relationships, channel partnerships, and reputation in a high-switching-cost enterprise security segment is plausibly $3–4B+. EPV of $2.63B equity vs. tangible reproduction value (book equity ~$561M, or maybe $1B adjusted) confirms EPV >> assets — this is a genuine franchise. The ROIC of 31% and FCF margin of 45% further validate above-cost-of-capital returns. The key Greenwald question then is: does growth here add value inside a protected franchise? I believe it does modestly — customer captivity in VM/VMDR is real (switching costs, integrated workflows, compliance certifications), but the moat is narrower than a true platform lock-in given competitive pressure from CrowdStrike Falcon, Tenable, and the emerging ServiceNow-Armis combination. The 10.96% revenue CAGR is real but decelerating (7–8% guided for 2026). Growth at 31% ROIC inside even a partial moat does create value — it's not value-neutral. So I'd apply a growth premium above EPV: if I assume 5–6 years of modest value-creating growth at current ROIC, a rough franchise value lands closer to $90–105/share — still below the $123 current price. The DCF intrinsic of $267 is heavily terminal-value dependent (81.9% terminal value weight) and I discount it sharply as per my methodology. The bear DCF of $204 is still above price but relies on continued ~11% FCF growth. Bottom line: Qualys is a genuine franchise with real barriers (customer captivity, scale in vulnerability intelligence, FedRAMP certifications), excellent profitability metrics, and disciplined capital return. But the stock trades at a premium to my conservative EPV, requiring growth to justify. That growth is plausible but not certain — 7–8% guidance and flatlining NDR (103%) suggest the franchise is maturing. The price is not a bargain by my standard, but for a high-quality franchise I'll shade toward 'pass' given the moat confirmation and note it as a thin-margin-of-safety situation rather than a deep value opportunity.

Key points

EPV estimate ~$73–74/share (NOPAT ~$175M / WACC 7.34%), well below current price of $123 — stock trades at ~1.7× EPV, requiring growth to justify
Moat confirmation: EPV ($2.63B equity) >> tangible reproduction assets ($561M book equity, maybe $1B adjusted) — signals genuine franchise with customer captivity and switching costs
ROIC of 31% and FCF margin of 45% confirm sustained above-cost-of-capital returns; these are the hallmarks of a franchise business
Revenue CAGR of 11% (3yr) decelerating to 7–8% guided FY2026; growth is real but moderating — franchise value uplift is moderate, not explosive
Minimal maintenance capex ($5M on $669M revenue) means almost all FCF is distributable — earnings power is 'clean' and the EPV normalization is relatively straightforward
$1.2B returned via buybacks since 2018, new $200M authorization — management allocating capital at cost below EPV is value-additive by my framework
DCF intrinsic of $267 is 82% terminal value — I treat this as indicative only; my EPV/asset triangulation is the anchor

Red flags

Price at 1.7× my EPV — meaningful growth premium baked in that requires franchise durability to be justified; thin margin of safety by Greenwald standards
NDR at 103% and decelerating (from 104%) with management guiding 'no material change' — suggests limited organic expansion power, which constrains the franchise-growth narrative
ETM (the core upside product) has zero disclosed adoption metrics after 12+ months — management's promise to disclose 'starting Q1 2026' signals lack of confidence in near-term ETM inflection
DCF is 81.9% terminal value dependent — exactly the type of valuation structure I distrust; the $267 intrinsic is not reliable as a margin-of-safety anchor
Competitive pressure intensifying: CrowdStrike, Tenable, and ServiceNow-Armis entering adjacent spaces may compress the moat over time — ROIC mean-reversion risk is real if switching costs erode
Insider selling by CLO and director under 10b5-1 plans at stock near YTD highs is a mild negative signal — routine but worth noting as management lacks obvious conviction to hold
Operating expense guided up 'mid-teens' for 2026 on only 7–8% revenue growth — operating leverage is running in reverse near-term, which could compress normalized earnings power

Michael Mauboussin — 🟢 pass · 74/100 · medium confidence

Qualys presents a genuine ROIC-above-WACC franchise in cybersecurity vulnerability management, but the expectations embedded in the current price appear modestly favorable — not requiring heroic assumptions. The DCF implies an intrinsic value of ~$267 vs. a current price of ~$123, suggesting the market is pricing in materially less than the base case. The key question is whether ROIC durability justifies confidence in that spread.

ROIC stands at 31.25% vs. a WACC of 7.34% — a spread of roughly 2,400 bps. This is a wide spread by any standard. The question is whether it is protected or mean-reverting. I assess it as structurally protected by real, identifiable moat mechanisms (see key points), but the trajectory shows some erosion signals (NDR declining, growth decelerating to 7-8%), which tempers conviction.

Expectations embedded in the price: At $123.27 with P/FCF of 14.26x on $304M FCF, the market is pricing essentially flat-to-modest real FCF growth — well below even management's conservative 7-8% guidance. The DCF's 10.96% FCF growth assumption (revenue CAGR-based) already looks conservative given the 45% FCF margin achieved in FY2025. Even in the bear scenario ($204), the stock trades at a substantial discount. This means the market appears to be pricing in secular deterioration or competitive displacement that the fundamentals do not yet confirm. That asymmetry — wide ROIC spread, 45% FCF margins, net cash balance sheet, but priced for stagnation — is the core thesis for a pass verdict.

However, I must weight the base rate carefully. Software companies with 10-11% revenue growth and 30%+ ROIC do sustain premium multiples — but growth deceleration from that level (to 7-8%) is a classic signal of competitive moat erosion or market saturation, and historically these trajectories continue to drift lower before recovering. The NDR declining from 104% to 103% with management guiding 'no material change' is a leading indicator of reduced expansion within the installed base. ETM/ROC thesis remains unproven at scale.

Capital allocation is disciplined: $1.2B returned via buybacks since 2018, new $200M authorization, minimal capex ($5M on $669M revenue = 0.7%), and no dilutive M&A visible. Management is buying back stock at what appears to be below intrinsic value — a value-creating act. The FCF yield at current price is approximately 7% ($304M FCF / $4.34B market cap), which is attractive for a business compounding at 10%+ organically with net cash.

Distributional thinking: Bull (30% probability) — ETM gains traction, NDR re-accelerates to 105-106%, channel/federal flywheel kicks in, stock re-rates to $200+. Base (50% probability) — 7-8% growth sustains, FCF margins hold in mid-40s, stock gradually re-rates to $160-180 as market recognizes undervaluation. Bear (20% probability) — growth decelerates further to 3-5%, competitive displacement from CrowdStrike/ServiceNow-Armis erodes VM premium, NDR falls below 100%, stock drifts to $90-100. Expected value across distribution is significantly above current price.

What would change my mind bearishly: NDR falling below 100% (net churn), gross dollar retention declining below 88%, ETM bookings contribution failing to materialize by Q3 2026, or evidence that ServiceNow-Armis bundle is winning VM displacement deals at scale.

Key points

ROIC of 31.25% vs. WACC of 7.34% = ~2,400 bps spread; this is a wide, structurally grounded return differential, not a thin commodity-grade margin
Moat mechanisms are real and specific: (1) Switching costs — Qualys agents are embedded in customer infrastructure; ripping out VM/VMDR requires retraining, re-credentialing, and workflow rebuilding, creating high procedural switching cost; (2) Scale economies in cloud delivery — single-tenant SaaS architecture with 45% FCF margins on $669M revenue demonstrates significant operating leverage; incremental revenue drops to FCF at very high rates; (3) Intangibles — FedRAMP certification, GigaOM #1 patch management ranking, 20+ year customer relationships, and data network effect (Qualys ThreatProtect database improves with scale of deployments)
Price embeds deeply pessimistic expectations: P/FCF of 14.26x on sustainably high-margin FCF, with net cash of $250M, implies ~7% FCF yield on a business growing 7-10% — the market appears to be pricing in permanent deceleration or competitive displacement not yet evidenced in financials
Capital allocation is excellent: $5M capex on $669M revenue (0.7%), $304M FCF, $1.2B in buybacks since 2018, new $200M authorization — management reinvests only where ROIC is high and returns excess cash; no empire-building M&A visible
Channel growth (17% vs. direct 4%) and international growth (15% vs. domestic 6%) suggest the TAM is not saturated and the go-to-market is expanding into underpenetrated segments — a positive trajectory signal for durable growth
FCF margin of 45.49% in FY2025 is a structural achievement reflecting the SaaS delivery model and high gross margins; this is a repeatable, skill-based advantage not a one-time event (FCF margins 37-45% across 2021-2025 history)

Red flags

NDR declining (104% Q3 to 103% Q4 FY2025) with management guiding 'no material change' — this is a leading indicator of reduced expansion velocity within the installed base; historically, NDR trends below 103% are correlated with revenue growth compression toward the mid-single digits
Revenue growth decelerating to 7-8% guidance for FY2026 from 10% in FY2025 and higher historically — this fits the base-rate pattern of mean-reversion in growth for mid-size SaaS companies; the outside view says this trend likely continues without a product inflection
ETM (Exposure/Risk Operations Center) thesis is the key upside driver but entirely unquantified: management declined to provide customer counts, penetration rates, or bookings attribution for 12+ months post-launch; 'encouraging early adoption' without metrics is a red flag for probabilistic analysis — it cannot be weighted
Gross dollar retention 'modest sequential decline' in Q4 — if this is structural rather than seasonal, it signals that some customers are reducing scope even before churning, which would erode the moat's durability faster than NDR alone implies
DCF terminal value represents 81.9% of enterprise value — the bulk of value depends on a 2.5% terminal growth rate sustained indefinitely; this is sensitive to any structural shift in the cybersecurity competitive landscape (AI-native entrants, consolidation) that compresses long-run pricing power
Insider selling (CLO Posey, director Pfeiffer) under 10b5-1 plans at multi-year highs is low-signal individually but the clustering of multiple insiders selling simultaneously while ETM metrics are withheld creates a mild information asymmetry concern

Ray Dalio — 🟢 pass · 72/100 · medium confidence

Qualys presents a macro/balance-sheet profile that is meaningfully more resilient than a typical single-regime-dependent tech name, though it is not a pure regime-agnostic compounder. The critical Dalio tests are: (1) balance sheet quality, (2) cash-flow durability under stress, (3) regime sensitivity, and (4) rate/debt-cycle exposure. On the balance sheet, QLYS is essentially debt-free in net terms — cash of $250M against total liabilities of $534M, with no disclosed long-term debt structure visible in the excerpts (debt-to-equity is null, suggesting minimal or no financial debt). Current ratio 1.41x is adequate. This is a self-funding business that generated $304M FCF in FY2025 on $669M revenue (45% FCF margin) with capex of only $5M — extremely capital-light and not reliant on capital markets to fund operations. In a credit contraction or deleveraging scenario, Qualys can sustain itself entirely through internal cash flows. Regime analysis: cybersecurity spending, particularly vulnerability management and patch automation, behaves more like a non-discretionary operating expense than a capex line item. Security budgets have proven sticky across cycles — enterprises cannot defer patching in a recessionary environment without catastrophic breach risk. This gives QLYS a degree of defensiveness in deflationary bust and stagflation scenarios that most tech names lack. Revenue CAGR of ~11% over 3 years with consistent FCF margins across 2021-2025 (42-45% range) demonstrates through-cycle stability. In an inflationary environment, Qualys's SaaS subscription model allows pricing pass-through at renewal; margins held above 33% operating margin in FY2025. International revenue at 44% provides moderate geographic diversification and some USD/non-USD balance, though FX headwinds are a real consideration if USD strengthens in a risk-off regime. The primary Dalio concerns are: (a) the business is still single-regime-dependent in the sense that its 7-8% growth guidance assumes a benign macro environment — in a severe growth recession, IT security budgets face scrutiny even if non-discretionary core spending holds; (b) NDR at 103% with declining trend suggests upsell momentum could compress further in a downturn; (c) the DCF-implied intrinsic value of $267/share vs. current $123 suggests the market is pricing significant caution, likely reflecting growth deceleration fears — from a regime perspective, the valuation is NOT priced for an overheating/exuberant scenario, which actually provides regime cushion; (d) high P/B (7.74x) means in a severe deflationary bust with equity multiple compression, drawdown risk is meaningful. The WACC of 7.34% in the DCF is plausible but if rates stay higher-for-longer, terminal value sensitivity (82% of EV) is the dominant risk — a 1% WACC increase would materially reduce intrinsic value. On correlation: QLYS has beta 0.61, providing genuine below-market beta and some diversification value in a typical equity book. Insider selling under 10b5-1 is routine and not a macro signal. Overall: strong balance sheet, capital-light self-funding model, non-discretionary demand characteristics, and below-market beta make QLYS a passable holding from a macro/risk lens. It is not a pure regime-robust asset (no real asset exposure, no inflation escalators in contracts, still a growth-dependent valuation), but it passes the key Dalio tests of balance-sheet resilience and cash-flow durability under stress.

Key points

Net cash position (~$250M cash, null long-term financial debt) — self-funding with no maturity wall or refinancing risk; survives a credit freeze without accessing capital markets
45% FCF margin ($304M on $669M revenue) sustained across 2021-2025 despite macro variation — demonstrates through-cycle cash flow durability
Cybersecurity/VM spending is non-discretionary in nature; breach risk forces enterprises to maintain patching/detection budgets even in recession, providing stagflation/bust defensiveness
Beta of 0.61 provides genuine below-market correlation and diversification value in a broad equity portfolio — consistent with Dalio's Holy Grail of uncorrelated return streams
International revenue at 44% of total provides geographic diversification; 15% international growth vs. 6% domestic suggests non-USD cash flow mix improving
DCF bear case ($204/share) still implies ~66% upside from current price — valuation is not priced for permanently low rates/high growth, reducing regime-shift downside relative to most tech peers
Terminal value is 82% of EV in the DCF — this is a concentration risk if WACC rises 100-150bps in a sustained higher-for-longer scenario

Red flags

Terminal value concentration (82% of DCF equity value) means a WACC increase of 100bps from rate regime shift would materially impair intrinsic value — the DCF's 7.34% WACC assumes current conditions persist
Growth deceleration to 7-8% guidance (from 10% FY2025) in a macro slowdown could compress further; NDR declining from 104% to 103% with management guiding 'no material change' signals limited upsell buffer in a downturn
Revenue is ~100% software/SaaS with no real asset exposure, commodity linkage, or contractual inflation escalators — not a natural inflation hedge in a stagflation regime, though SaaS renewals do allow repricing
High P/B ratio (7.74x) means in a severe deflationary bust with equity multiple compression, mark-to-market drawdown could be severe even if fundamentals hold
Insider selling activity (CLO, director, Form 144 RSU filings in June 2026) near YTD highs is modest but worth monitoring for regime-change signals from those with insider visibility

Forensic Short-Seller (Chanos/Einhorn-style) — 🟢 pass · 72/100 · medium confidence

Forensic accounting tests on QLYS return a surprisingly clean result for a momentum/growth cybersecurity name. The core Chanos test — earnings vs. cash — is a clear pass: operating cash flow ($309.4M) materially EXCEEDS GAAP net income ($198.3M) in FY2025, a ratio of ~1.56x. FCF ($304.4M) also exceeds net income, producing a negative accrual ratio. This is the opposite of the classic short pattern. Across the 5-year history, FCF has consistently tracked above or near net income: 2021 FCF $176M vs NI $71M; 2022 FCF $183M vs NI $108M; 2023 FCF $236M vs NI $152M; 2024 FCF $232M vs NI $174M; 2025 FCF $304M vs NI $198M. The OCF-to-NI spread is consistently wide and positive, suggesting minimal accrual manipulation. Capex is negligible ($5M in 2025 on $669M revenue, <1%), eliminating capitalized-cost distortion as a concern — Qualys is a pure SaaS model with almost no CapEx line to hide costs in. The balance sheet shows $561M stockholders' equity, $250M cash, and the filing reports zero debt-to-equity (debt_to_equity: null, suggesting minimal or no financial debt). Current ratio of 1.41x is adequate. No going-concern language, no auditor changes, no restatements flagged. SBC is a legitimate concern: the difference between GAAP NI ($198M) and EBITDA-adjusted (~47% of $669M = ~$314M) implies ~$116M of adjustments, with SBC likely a large component. Share count needs scrutiny — with $1.2B in buybacks since 2018 and shares outstanding at only ~35.7M, the repurchase program appears genuinely accretive, not merely a dilution treadmill. Insider selling (Bruce Posey CLO ~$95K, Wendy Pfeiffer director ~$55K, under 10b5-1 plans) is immaterial in dollar terms relative to a $4.3B market cap, and routine for pre-scheduled plans. The bear case risks — slowing NDR (103%, declining), revenue growth decelerating to 7-8%, ETM adoption unproven, competitive pressure from ServiceNow-Armis — are legitimate business risks but NOT accounting risks. The kill question for a short: if OCF were to fall below net income for 2-3 consecutive quarters, DSO were to spike, or if 'adjusted' metrics diverged sharply from GAAP cash reality, that would be the thesis. None of those conditions are present. The one genuine forensic yellow flag is the SBC-to-GAAP-earnings gap deserves monitoring, and the lack of filing detail in the excerpts prevents full DSO/receivables trend analysis. Score reflects a clean accounting bill of health with modest uncertainty due to truncated filing data.

Key points

OCF ($309.4M) exceeds GAAP NI ($198.3M) by 56% in FY2025 — negative accrual ratio, the opposite of the classic short signal
FCF ($304.4M) also exceeds NI across all 5 years of history; no single year shows earnings outrunning cash
CapEx is negligible at <1% of revenue ($5M), eliminating capitalized-cost/expense-shifting as a forensic concern
Debt-to-equity reported as null/zero; $250M net cash position; no refinancing risk or debt wall
Buybacks ($1.2B since 2018) appear genuinely accretive given shares outstanding at ~35.7M at reporting date
Insider sales (Posey $95K, Pfeiffer $55K) are immaterial in dollar terms and under pre-scheduled 10b5-1 plans

Red flags

SBC exclusion from 'adjusted' EBITDA (~47% margin) vs GAAP NI (~30% margin) implies ~$116M+ in adjustments — SBC as % of adjusted profit warrants monitoring
Filing excerpts are XBRL/truncated — full DSO, unbilled receivables, and deferred revenue trend analysis not possible from available data
NDR declining (104% → 103%) and management's explicit guidance of 'no material change' could foreshadow deferred revenue run-off if churn accelerates — a lead indicator to watch in quarterly filings
Revenue growth decelerating (10% → 7-8% guided) with 'mid-teens' opex increase guidance creates margin compression risk that could pressure future FCF normalization
ETM adoption metrics withheld until Q1 2026 disclosure — absence of quantification is a mild governance yellow flag (story stock risk if metrics disappoint)

AI & Disruption Referee (Christensen-style) — 🟢 pass · 72/100 · medium confidence

Qualys occupies a genuinely interesting position in the AI/disruption taxonomy: it is not a passive intermediary or a human-labor-intensive service business, but rather a cloud-native data platform that collects continuous, proprietary telemetry about vulnerability states across customer environments. The core job-to-be-done — enumerate every asset, assess its exploitability in the context of the actual customer environment, prioritize by real-world risk, and drive remediation at machine speed — is one where AI is, on balance, a tailwind rather than an existential threat, with important caveats.

The obsolescence test: The specific value Qualys delivers is not generic vulnerability scoring (CVSS numbers are freely available) but contextualized, continuously updated, environment-specific risk state — which asset is exploitable today, via which path, given this customer's actual network topology and patch state. Replicating this requires the proprietary sensor/agent data that only Qualys (or a competitor with equivalent deployment scale) possesses. A foundation model trained on public CVE data does not know what is actually running in a given customer's environment, has not deployed 140M patches, and cannot validate exploitability without the live telemetry. This data-collection moat is real and not easily replicated by a hyperscaler deploying a general-purpose LLM.

Moat compounding vs. commoditizing: Qualys' moat is the breadth and freshness of its sensor network plus the feedback loop: every patch deployed, every exploit confirmed, every false positive corrected teaches the platform. The agentic AI layer (Agent Val for exploit confirmation, Agent Sarah for patching) is being built on top of this proprietary telemetry, not as a standalone LLM wrapper. This is the architecture that compounds rather than erodes the moat — the data feedback loop becomes the training signal that makes the AI more accurate over time. Compare this to, say, a vulnerability advisory service that summarizes NVD feeds with an LLM: that IS commoditizable. Qualys' exploitation validation ('safe exploit' workflows confirming real exploitability vs. theoretical CVSS scores) is differentiated and hard to replicate without the agent footprint.

Hyperscaler / platform capture risk: This is the most credible threat. Microsoft (Defender for Endpoint + Security Copilot), CrowdStrike (Falcon), and increasingly ServiceNow-Armis have the distribution, the endpoint presence, and the capital to commoditize vulnerability management as a bundled feature. Microsoft in particular already has endpoint telemetry at scale. The specific risk is that enterprise security buyers decide 'good enough' VM bundled with the EDR/SIEM they already pay for replaces standalone Qualys. Management's framing of Armis as 'lacks patch, lacks exploit validation' is partially valid but deflects the Microsoft-bundle risk, which is the sharper question. The fact that NDR is flatlining at 103% and guidance is 7-8% growth (decelerating) could be the early signal of exactly this bundle-squeeze dynamic.

Management's AI posture: Management is leaning INTO the AI transition rather than away from it — the Risk Operations Center narrative, agentic AI, exploit confirmation, and QFlex are all genuine responses that embed Qualys deeper into customer workflow. However, management does NOT engage honestly with the hyperscaler bundling threat. The competitive discussion in the earnings call focuses on Armis (asset inventory, relatively benign) while avoiding the Microsoft/CrowdStrike question. This selective framing is a yellow flag.

Falsifiable call: Evidence of AI displacing Qualys over 2-4 years would look like: (1) NDR declining below 100%, driven by churn to bundled endpoint-vendor VM tools; (2) take-rate compression / price-per-asset declining as buyers negotiate on VM commoditization claims; (3) Microsoft or CrowdStrike publishing materially equivalent patch-management and exploit-confirmation capabilities. Evidence disproving displacement: (1) ETM adoption metrics (promised for Q1 2026) showing double-digit penetration of the installed base — indicating the platform is deepening, not commoditizing; (2) NDR re-accelerating above 105%; (3) new logos and channel growth driven by ROC differentiation, not legacy VM renewal.

AI as cost tailwind: On the cost side, agentic AI should structurally reduce Qualys' labor-intensive threat-research and triage costs, expanding margins. The 47% EBITDA / 45% FCF margin profile already reflects a lean model; AI should extend this further, not threaten it.

Bottom line: Qualys is a cybersecurity data infrastructure company, not a knowledge-work intermediary. Its moat rests on proprietary sensor telemetry that AI makes more valuable, not less. The disruption risk is real but second-order — not 'AI replaces Qualys' but 'a well-capitalized platform bundles good-enough VM and Qualys' addressable market shrinks.' The decelerating growth (7-8%) and flat NDR are the live stress test for this hypothesis. At this stage the evidence is mixed but not yet decisively negative. Score 72: a narrow pass with active monitoring required.

Key points

Core moat is proprietary sensor telemetry (140M patches deployed, exploit-confirmation feedback loop) that AI compounds rather than commoditizes — generic LLMs cannot replicate environment-specific exploitability validation without this agent footprint
Agentic AI architecture (Agent Val, Agent Sarah) is built atop proprietary data, creating a self-reinforcing feedback loop consistent with a compounding rather than eroding moat
AI is a cost-side tailwind: agentic automation of triage, exploit confirmation, and patching should structurally expand already-high FCF margins (currently 45%)
Management is actively repositioning toward autonomous remediation (ROC narrative) rather than denial — qualitatively positive on disruption posture
Federal FedRAMP certification and channel expansion create multi-year demand tailwinds from AI-driven regulatory pressure on cyber-risk quantification
The falsifiable upside test (ETM penetration metrics, NDR re-acceleration) is manageable and scheduled to be disclosed by Q1 2026 earnings

Red flags

Hyperscaler bundling is the primary underacknowledged risk: Microsoft Defender + Security Copilot and CrowdStrike Falcon have endpoint telemetry at scale and are credible 'good-enough' VM bundlers that management does not address directly in competitive commentary
Growth deceleration to 7-8% and flat NDR (103%, no improvement guided) could be the early signal of bundle-squeeze commoditization that the Christensen lens specifically flags — statistical cheapness may partially price this in
Management selectively frames competition (Armis/ServiceNow, benign) while avoiding the Microsoft/CrowdStrike hyperscaler question — a yellow flag on disruption honesty
ETM adoption metrics withheld from Q4 2025 disclosure despite 12+ months live — inability to quantify the core upside thesis raises concern that agentic AI differentiation has not yet translated to measurable commercial inflection
AI-native entrants (pure cloud-native exposure management startups with LLM-native architectures) could undercut Qualys on price for SMB/mid-market segments where Qualys sensor infrastructure is less deeply embedded

Philip Fisher — 🟡 watch · 58/100 · medium confidence

Qualys presents a mixed picture through the Fisher growth lens. The company has real product innovation (agentic AI, ETM exploit confirmation, autonomous patch remediation), genuine profitability discipline, and credible competitive differentiation in cybersecurity risk orchestration. However, the core Fisher criterion — sustained above-average organic sales growth with a visible multi-year runway — is under strain. Revenue CAGR of ~11% over three years is respectable but decelerating sharply: FY2025 came in at +10% YoY, and management has explicitly guided FY2026 at only +7-8%, anchored to 'low to mid single-digit security spend growth.' NDR of 103% (down from 104%) with management's own guidance of 'no material change' signals the expansion engine is not firing. ETM — the platform that should drive the next growth leg — has been live 12+ months yet management provided zero concrete adoption metrics (customer count, penetration, bookings share), promising disclosure only 'starting Q1 2026.' Fisher demanded scuttlebutt-confirmable evidence of franchise strength; the absence of ETM metrics is a yellow flag. On the positive side: operating margins of 33%, FCF margins of 45%, ROE of 35%, and ROIC of 31% are exceptional by any peer measure and confirm Fisher's Point 5/6 (protected margins). Management's channel investment (channel revenue now 51%, +17% growth) and international expansion (+15%) show real salesforce development (Point 4). The R&D-to-product pipeline story is credible: patch management leadership confirmed by GigaOM, agentic AI agents ('Val,' 'Sarah') addressing remediation bottlenecks, QFlex removing adoption friction. CEO Samantha Clark's commentary was direct on competitive positioning and candid about NDR trajectory, which Fisher would respect (Points 14/15). However, the 'mid-teens increase in operating expenses' guided for 2026 against only 7-8% revenue growth creates real margin compression risk — Fisher would note this tests whether investment is for growth or defending position. Insider selling (CLO Posey, director Pfeiffer) under 10b5-1 plans at multi-year highs is worth noting but not disqualifying. The DCF base-case intrinsic value of $267 vs. current price of $123 suggests significant margin of safety if growth reaccelerates, but the model relies heavily on terminal value (82% of EV) and uses 11% FCF growth — which exceeds current revenue guidance. Overall: a high-quality franchise with real innovation but at a growth inflection point where the new platform has not yet converted potential into demonstrated acceleration. Fisher would hold existing positions but not add aggressively until ETM metrics confirm the next growth leg.

Key points

Revenue CAGR 11% (3-year) but decelerating to guided 7-8% in FY2026 — below Fisher's threshold for 'above-industry' sustained growth
ETM agentic AI platform is genuinely differentiated (exploit confirmation + autonomous remediation) but lacks disclosed adoption metrics after 12+ months in market — Fisher would demand scuttlebutt corroboration
FCF margins of 45%, operating margins of 33%, ROIC of 31% confirm superior margin protection — classic Fisher Point 5/6 strength
Channel revenue growing 17% and international +15% demonstrate active sales organization building (Point 4)
Management candor on NDR trajectory ('no material change') and ETM disclosure timeline ('Q1 2026') is honest but reveals limited near-term visibility
$304M FCF on $669M revenue with minimal capex ($5M) is a compounding machine — capital-light model Fisher prized
QFlex pricing model and partner MROC ecosystem building suggests long-term orientation over short-term revenue maximization

Red flags

Growth deceleration: 10% FY2025 → 7-8% FY2026 guidance; billing growth already slowed to 8% vs. 9% in FY2024 — the trend is wrong direction
NDR at 103% and declining with management explicitly forecasting no improvement — upsell engine stalling despite ETM investment
Zero ETM customer or bookings metrics provided after 12+ months of availability — Fisher would view this opacity as a serious scuttlebutt gap
Mid-teens OpEx growth planned against 7-8% revenue guidance creates execution risk and potential margin compression
Terminal value constitutes 82% of DCF intrinsic value — upside thesis is heavily dependent on long-term assumptions, not near-term execution
Gross dollar retention showing 'modest sequential decline' in Q4 2025 — potential early churn signal worth monitoring
Insider selling by CLO and director at multi-year highs, even under 10b5-1, coincides with stock at 52-week high

Howard Marks — 🟡 watch · 55/100 · medium confidence

QLYS presents a genuinely interesting risk/reward puzzle from a Marks-style lens. The DCF intrinsic value ($267 base, $204 bear) suggests a meaningful discount to fair value at $123 — roughly a 54% discount to base case and 40% even in the bear scenario. That is the kind of margin of safety I look for. However, the quality of that discount must be interrogated. The DCF leans heavily on terminal value (82% of enterprise value), which means you are paying up today for a business whose value is mostly an extrapolation of 11% growth in perpetuity at 7.3% WACC — a construct that is extremely sensitive to assumptions. The bear case at $204 still implies ~65% upside, which is encouraging, but only if the FCF trajectory holds. The business itself is high-quality — 45% FCF margins, no meaningful debt (net cash of $250M), ROIC of 31%, current ratio of 1.4x — so the structural/balance sheet risks I fear most are largely absent here. This is not a capital structure problem. The risk instead is embedded-expectations risk: is the market pricing in a deteriorating growth story (7-8% guidance, decelerating NDR from 104% to 103%, gross dollar retention showing modest sequential decline) correctly, or is it still too optimistic? The price sitting at the 52-week high today ($123 = 52w high per the price block, though the fundamentals block shows 52w high of $155) suggests recent recovery from deep lows ($74.51). The stock was near 5-year lows in early May 2026 per discussion posts — that is the capitulation signal I look for. It has since rallied ~65% off those lows. Some fear has been wrung out. Retail sentiment is now bullish-but-shallow (technical breakout chasers, call buyers at $130 7/17), not the deep fundamental conviction that would signal a crowded consensus. Insider selling under 10b5-1 plans is routine but notable timing near YTD highs. The second-level question is critical: the consensus appears to be pricing in a slow-growth, commoditizing VM business. If ETM adoption inflects — even modestly — the 7-8% growth baseline becomes very conservative. Management's explicit guidance of 'no material change in NDR' is either conservative sandbagging (Marks: 'I love a low bar') or honest acknowledgment of limited visibility. The bear case — where ETM fails to scale, NDR drifts below 100%, and growth falls to 5% — is not reflected in current pricing at 14x FCF and 22x earnings, but these are not expensive multiples for a business with 45% FCF margins and net cash. At 14x FCF you are paying a reasonable price for a defensive, cash-generative business even if growth disappoints. The cycle concern: cybersecurity spending is secular, not deeply cyclical, though budget pressure is real. Capital structure is fortress-like. The asymmetry is moderately favorable — downside from here appears limited by the FCF yield and buyback support ($200M new authorization on a $4.3B cap), while upside depends on ETM inflection that is unpriced. This is a 'watch' rather than a 'pass' because the stock has already recovered substantially from panic lows, sentiment is no longer pessimistic, and the ETM thesis is unproven. I would want to see Q1 2026 ETM metrics before declaring the bar definitively low.

Key points

DCF bear case ($204) implies ~65% upside from $123 — meaningful margin of safety even under stress assumptions
Balance sheet is fortress-like: net cash $250M, no meaningful debt, 1.4x current ratio, 31% ROIC — structural/bankruptcy risk essentially absent
Price/FCF of 14.3x is not a demanding multiple for a 45% FCF-margin business; even in a growth-disappointment scenario, FCF yield provides downside support
Stock recovered from near-5-year lows (~$74) to $123 — some fear/capitulation was present; now at 52-week high, momentum has shifted
Management explicitly guided 'no material change in NDR' for 2026 — this sets a low bar that ETM adoption, federal expansion, or channel acceleration could beat
$1.2B returned via buybacks since 2018, new $200M authorization signals confidence in cash generation and provides price support

Red flags

82% of DCF enterprise value is terminal value — intrinsic value estimate is highly sensitive to WACC and terminal growth assumptions; a 1-2% WACC increase or lower terminal growth collapses the bull case materially
Stock is AT the 52-week high ($123 = high per price block) — no longer cheap on a sentiment/positioning basis; the contrarian entry point was $74-90, not here
ETM adoption remains completely unquantified after 12+ months of availability — management promises metrics 'starting Q1 2026'; lack of data is a red flag for the core upside thesis
Revenue CAGR decelerating: 11% 3-year CAGR but 2026 guidance of 7-8%; NDR declining (104% → 103%); gross dollar retention showing modest sequential decline — trajectory is the wrong direction
Insider selling (CLO Bruce Posey, director Wendy Pfeiffer) timed coincidentally near YTD highs; 10b5-1 plans are routine but scale/timing warrants monitoring
Retail options activity ($130 7/17 calls) and technical-breakout chatter signals shallow, momentum-driven sentiment rather than value-driven accumulation — risk of crowding at current levels

Stanley Druckenmiller — 🟡 watch · 52/100 · medium confidence

QLYS is a high-quality cybersecurity franchise with exceptional FCF generation (45% FCF margin), but the critical Druckenmiller test — is the second derivative of earnings and revenue growth INFLECTING UPWARD — fails here. Management guided FY2026 to 7-8% revenue growth, a deceleration from 10% in FY2025 and 9% in FY2024. EPS guidance of $7.17-$7.45 for FY2026 represents only ~1-5% growth vs. $7.07 in FY2025 — a near-stall in earnings momentum. NDR is at 103% and management explicitly guided 'no material change,' meaning the upsell engine is not accelerating. These are all second-derivative negatives — the rate of change is turning down, not up. The ETM/agentic AI thesis is compelling directionally but management declined to provide any metrics on adoption, penetration, or bookings contribution, making it impossible to construct a forward earnings acceleration argument. On the tape: the stock is at its 52-week high at $123.27 (currently coinciding with the high), having recovered from $74.51 lows — that's positive price action confirming some momentum. Retail sentiment is bullish and technically oriented. The DCF signals significant undervaluation ($267 base case intrinsic value vs. $123 price), but this is a steady-compounding DCF story, not a Druckenmiller-style earnings inflection trade. The WACC at 7.34% and 11% growth assumption in the DCF may be generous given 7-8% revenue guidance. On liquidity/macro: QLYS has beta of 0.61 — it's not a high-octane liquidity beneficiary. Cyber security spend is described as 'low to mid single-digit growth,' not an accelerating macro tailwind. The 'why now' catalyst — ETM/AI ROC adoption — is real but unquantified and 12+ months from visibility. Capital allocation is disciplined ($200M buyback authorized), but buybacks in a decelerating growth story signal lack of reinvestment optionality. Insider selling (CLO, director) under 10b5-1 plans at multi-year highs is a modest negative signal. Not a short — the quality is genuine, valuation reasonable, and price action is constructive. But it lacks the earnings acceleration, estimate revision upgrade cycle, and catalytic 'why now' that would warrant a concentrated, high-conviction Druckenmiller-style bet. Watch for Q1 2026 ETM metrics; if penetration is accelerating materially, this becomes a much more interesting setup.

Key points

Revenue growth decelerating: 10% FY2025 → guided 7-8% FY2026; EPS growth near flat ($7.07 → $7.17-$7.45)
FCF margin exceptional at 45% ($304M) but not inflecting — Q4 2025 FCF margin comparable to historical average
Price action constructive — stock at 52-week high of $123.27, recovered sharply from $74.51 lows, breaking out technically
DCF signals ~117% upside to $267 intrinsic value but this is a steady compounder story, not an earnings inflection bet
ETM/agentic AI thesis is the potential second-derivative catalyst but zero quantitative metrics provided by management — 'too early'
Channel revenue growing 17% vs. direct +4% suggests mix shift may sustain but masks underlying ARPU dynamics
Beta 0.61 makes this a low-liquidity-beta name — less leveraged to Fed easing tailwind than pure growth plays

Red flags

NDR explicitly guided flat at 103% — no expansion expected, core second-derivative negative
EPS growth near-stall: $7.07 (2025) to $7.17-$7.45 (2026 guidance) — only 1-5% EPS growth
Management refused to disclose ETM adoption metrics despite 12+ months live — opacity undermines forward earnings conviction
Gross dollar retention 'modestly declined sequentially in Q4' — subtle churn signal
Operating expense guided for mid-teens increase while revenue grows 7-8% — margin pressure risk in 2026
Insider selling (CLO Bruce Posey, director Wendy Pfeiffer) at multi-year highs under pre-scheduled plans
No identifiable near-term catalyst with defined timing — ETM GA in 2026 is vague, federal pipeline is multi-year

Benjamin Graham — 🟡 watch · 52/100 · high confidence

Qualys presents an unusual hybrid: a genuine, profitable, cash-generative business with a decade of positive and growing earnings — but priced far above Graham's conservative value benchmarks, with a balance sheet that falls short of his defensive criteria and no dividend history. The DCF intrinsic value of $267 per share (117% upside) is tempting, but it rests heavily on terminal value (82% of equity value) and a growth rate projection, not on asset coverage or net-net backing — exactly the kind of speculative arithmetic Graham distrusted. On earnings quality, QLYS scores well: positive net income every year 2021–2025 ($71M → $198M), FCF margins consistently above 38%, and a 3-year revenue CAGR of ~11%. But the price fails every Graham multiple test. Trailing P/E of 21.9x exceeds Graham's 15x defensive cap. P/B of 7.74x is rich; the Graham composite rule (P/E × P/B ≤ 22.5) yields 21.9 × 7.74 = 169 — roughly 7.5x his ceiling. Earnings yield of 5.4% barely exceeds a high-grade bond yield and offers scant cushion. On balance sheet, current ratio of 1.41 falls well short of Graham's 2.0 minimum; current assets ($657M) do not cover total liabilities ($534M) by the required margin, and NCAV (current assets $657M minus total liabilities $534M = $123M) is just $3.45/share versus a $123.27 price — nearly 36x NCAV, light-years from net-net territory. Debt-to-equity is null/unclear but total liabilities are 49% of assets. No dividends paid — a structural disqualifier for Graham's defensive investor screen. The $1.2B in buybacks since 2018 is capital discipline but not a Graham substitute for dividends. What keeps this from 'avoid' is the genuine earnings durability, the conservative DCF bear-case of $204 (still 65% above current price suggesting market may be pricing in pessimism), and the low beta (0.61) suggesting Mr. Market is not euphorically pricing this name. Growth is moderating (7–8% guided for 2026), NDR flatlining at 103%, and insider selling under 10b5-1 plans — all bearish signals from a Graham temperament. This is a quality business, not a Graham bargain.

Key points

Earnings record clean and growing: net income positive every year 2021–2025, rising from $71M to $198M (+179% over 4 years), well exceeding Graham's one-third growth criterion
FCF margins exceptional (38–45% range), operating margin 33%, ROIC 31% — underlying business economics are strong
Trailing P/E 21.9x materially exceeds Graham's 15x defensive cap; P/E × P/B of ~169 is ~7.5x his composite ceiling of 22.5
NCAV per share is approximately $3.45 ($657M current assets – $534M total liabilities ÷ 35.7M shares) versus $123.27 price — no net-net margin of safety whatsoever
Current ratio 1.41 fails Graham's minimum 2.0; current assets do not comfortably cover total liabilities
No dividends paid — disqualifies for Graham's defensive investor screen; $1.2B in buybacks is disciplined but not equivalent
DCF intrinsic value $267/share implies 117% upside, but 82% of that value is terminal value — exactly the speculative growth arithmetic Graham warned against
Bear-case DCF of $204 still implies 65% upside, suggesting market pessimism may be baked in, which is the one Graham-positive signal

Red flags

P/E × P/B composite of ~169 vastly exceeds Graham's 22.5 ceiling — no margin of safety on a combined multiple basis
Current ratio 1.41 below Graham's 2.0 minimum defensive threshold
No dividend history — fails Graham's reliability criterion for defensive investors
NCAV of ~$3.45/share versus $123.27 price means stock trades at ~36x net current asset value — zero asset-based margin of safety
82% of DCF equity value derives from terminal value, making the intrinsic value estimate highly sensitive to growth assumptions Graham would distrust
Revenue growth decelerating to 7–8% guided for 2026; NDR flatlining at 103% with management explicitly forecasting no improvement
Multiple insider sales (CLO Posey, director Pfeiffer) in June 2026 under 10b5-1 plans at or near 52-week highs — insider conviction signal is neutral-to-negative

Seth Klarman — 🟡 watch · 52/100 · medium confidence

Qualys presents a genuinely interesting but imperfect value case. The DCF intrinsic value of $267/share (base) vs. a $123 current price implies a 117% upside, which at first glance screams margin of safety. However, Klarman-style analysis demands stress-testing the downside conservatively, not anchoring on an optimistic DCF. The DCF is heavily terminal-value weighted (81.9% of enterprise value rests on the terminal value), which is exactly the kind of single-method, growth-dependent valuation that Klarman distrusts. The bear-case DCF of $204/share still implies substantial upside, but this bear case still assumes ~11% FCF growth continuing — it is not a true conservative floor. Re-anchoring to normalized cash flows: FCF of $304M at a conservative 12-15x private-market multiple (no growth premium) yields $3.6B–$4.6B enterprise value plus $250M net cash = $3.85B–$4.85B equity value, or roughly $108–$136/share. At $123, the stock trades near the midpoint of this conservative range — not below it. Thus the margin of safety is thin or absent on a truly conservative basis. On the positive side: the balance sheet is clean (no debt disclosed, net cash of $250M, current ratio 1.4x), FCF margins are exceptional (45%), ROIC of 31% demonstrates genuine business quality, and the low beta (0.61) suggests the stock is not a momentum vehicle. The business is a durable SaaS security platform with >90% gross dollar retention. These are real, tangible cash flow characteristics. Against this: growth is decelerating to 7-8% guided for 2026, NDR is flatlining at 103% with management explicitly guiding 'no material change,' the ETM upsell thesis is unproven at scale (no concrete metrics disclosed), and insider selling (CLO Bruce Posey, director Wendy Pfeiffer) under 10b5-1 plans coincides with the stock approaching multi-year highs. There is no special-situation catalyst — no forced selling, no spin-off, no distress, no complexity discount that creates a structural mispricing. The price dislocation (stock was near 5-year lows in May 2026 at ~$74) appears to have already been arbitraged away as the stock has rallied ~65% since those lows to the current $123. The opportunity to buy with a real margin of safety likely existed at $74-85; at $123 the easy money has been made. The quality of the business earns a 'watch' rather than 'avoid' — if the stock revisited the $85-95 range, the Klarman calculus improves substantially. At current prices, the asymmetry is insufficient for a conviction buy from a downside-first perspective.

Key points

DCF base of $267/share implies 117% upside but is 82% terminal-value dependent — a red flag for conservative value appraisal
Normalized FCF ($304M) at conservative 12-15x no-growth multiple yields ~$108-136/share equity value; stock trades at $123, near the mid-range — thin or absent margin of safety
Balance sheet is genuinely strong: net cash $250M, no reported debt, current ratio 1.41x — preserves downside floor
45% FCF margin and 31% ROIC confirm real, durable cash generation that backs a going-concern value
Business has >90% gross dollar retention and a defensible position in vulnerability management, providing earnings visibility
Stock has already rallied ~65% from May 2026 lows (~$74), suggesting the deep-value entry point has passed
No special-situation catalyst: no spin-off, distress, forced selling, or complexity discount creating structural mispricing

Red flags

Value thesis depends heavily on terminal growth assumptions (81.9% TV weight) — fails Klarman's multi-method, conservative-floor test
Revenue growth decelerating to 7-8% guided FY2026 vs 10% FY2025; NDR flatlining at 103% with 'no material change' guidance — upside requires ETM inflection not yet visible
ETM adoption thesis unproven: management provided zero concrete metrics on customer count or penetration rate after 12+ months; disclosure deferred to Q1 2026
Insider selling by CLO and director under 10b5-1 plans coincides with stock approaching multi-year highs — soft negative signal
No margin of safety on conservative asset-based or normalized-cash-flow floor at current $123 price; entry 30-35% lower would be compelling
Operating expense guidance implies 'mid-teens increase' in 2026 opex on 7-8% revenue growth — execution risk that could compress FCF below DCF assumptions
Retail sentiment is momentum/technically-driven (call option buying, breakout commentary) rather than fundamental — consistent with indiscriminate buying Klarman avoids

Peter Lynch — 🟡 watch · 52/100 · medium confidence

Qualys is a stalwart-category cybersecurity SaaS business — understandable in one sentence (cloud-native vulnerability management and risk operations for enterprises, sold on subscription), profitable, and generating real cash. The problem through my lens is the PEG ratio. The fact base gives P/E of ~21.9 and a PEG of 2.0, which is nearly double my threshold of 1.0. EPS grew ~13% in FY2025 (from $6.26 implied to $7.07 reported), and FY2026 guidance of $7.17–$7.45 implies only ~1–5% EPS growth. Revenue CAGR over three years is ~11%. Even being generous and using 10–11% as the long-run EPS growth rate, the PEG sits comfortably above 1.5. That alone disqualifies this from being a 'buy' under my criteria — I never want to pay a P/E twice the growth rate. The story is not complicated: Qualys does VM/patching/risk operations, the product is sticky (gross retention >90%), FCF margins are exceptional at 45%, the balance sheet is net cash positive (~$250M cash, debt-to-equity not calculable but liabilities manageable), and buybacks are ongoing ($1.2B returned, new $200M auth). All of those are positives I'd normally love. But this is a stalwart decelerating toward slow-grower territory — 7–8% revenue guidance for 2026, NDR flat at 103% with management explicitly flagging 'no material change,' and the ETM upsell thesis unproven at scale. For a stalwart I want to buy at a PEG of 0.75–1.0 and sell at 30–50% gains; here I'm being asked to enter at PEG ~2.0 with growth slowing. The DCF suggests meaningful intrinsic value upside ($267 base vs. $123 price), but that model leans heavily on terminal value (82% of EV) and assumes 10%+ FCF growth in perpetuity — I'd want to see the earnings-growth story confirmed by NDR expansion and ETM metrics before trusting that. Insider selling under 10b5-1 plans is routine but not encouraging at a stock near YTD highs. The company is not neglected — it passes GARP screens and shows up in news flow regularly. I'd revisit on any pullback to a PEG closer to 1.0, or if Q1 2026 earnings show ETM bookings inflecting and NDR moving back toward 106–108%.

Key points

PEG of 2.0 is well above my 1.0 threshold — the core disqualifier for a stalwart with ~11% earnings growth
Stalwart classification fits: 10–11% revenue CAGR, subscription model, 90%+ gross retention, consistent profitability
Exceptional FCF margin (45%), net cash position (~$250M), no debt stress — balance sheet is clean
Buybacks ($1.2B since 2018, new $200M) signal management confidence and reduce share count
FY2026 guidance of 7–8% revenue growth and flat NDR (103%) signals deceleration, not acceleration — typical stalwart maturing
ETM/AI agentic upsell is the upside narrative, but management offered zero concrete metrics; 'encouraging early adoption' is not verifiable
Channel growing 17% vs. direct +4% shows diversification but also masks potential ARPU mix shift
DCF intrinsic value of $267 vs. $123 current price is compelling but relies on 82% terminal value weight — needs growth confirmation first

Red flags

PEG ~2.0 — paying twice the growth rate is exactly how you overpay for even a good stalwart
FY2026 EPS guidance ($7.17–$7.45) implies near-zero to ~5% EPS growth, making the PEG look even worse near-term
NDR declining sequentially (104% Q3 → 103% Q4) with management forecasting 'no material change' — expansion stalled
ETM adoption unquantified after 12+ months live — no customer count, no bookings %, no penetration rate disclosed
Insider selling by CLO and a director under 10b5-1 plans, coinciding with stock near 52-week highs (YTD high as of data)
Management guiding 'mid-teens increase in operating expenses' on only 7–8% revenue growth — margin compression risk if growth disappoints
Growth deceleration pattern: revenue growth 19%→13%→10%→8% projected — classic stalwart maturing toward slow grower

Walter Schloss — 🔴 avoid · 22/100 · high confidence

Qualys fails virtually every Schloss criterion. The stock trades at 7.74x price-to-book — far above the near-or-below-tangible-book threshold that defines a Schloss bargain. Worse, the current price ($123.27) is exactly at the 52-week high, not at a multi-year low. Schloss bought beaten-down, out-of-favor names; QLYS is at peak price. Tangible book is further compromised by the asset-light, subscription SaaS model: total assets of $1.095B vs. total liabilities of $534M yields stockholders' equity of $561M, but this includes significant intangibles and deferred revenue dynamics typical of software companies — there are no factories, real estate, or hard assets that provide Schloss-style appraised downside protection. The balance sheet is not leveraged (debt-to-equity appears negligible, net cash of ~$250M), which is a partial positive, but that is the only meaningful check in Qualys' favor. The thesis entirely depends on growth narratives (ETM adoption, agentic AI, federal expansion) and earnings forecasts — exactly what Schloss avoided. The DCF intrinsic value of $267/share is a forecast-dependent number, not an asset-based floor. Insider activity is net negative: multiple Form 4 sales by the CLO and a director in June 2026 under 10b5-1 plans, with no reported buying. P/E of 21.9x and P/FCF of 14.3x are not egregious for a quality business, but they are not Schloss territory. The company generates exceptional FCF margins (45%) and ROIC (31%), which confirms it is an excellent business — but Schloss explicitly did not pay for quality; he paid for asset cheapness with a margin of safety in the balance sheet, not in the income statement.

Key points

Price-to-book of 7.74x is far above any Schloss threshold; no margin of safety in tangible assets
Stock is at its exact 52-week high ($123.27), the opposite of Schloss's beaten-down, out-of-favor criterion
Asset-light SaaS model: no factories, real estate, or hard tangible assets to anchor downside protection
Net cash position (~$250M) and no material long-term debt is the one balance-sheet positive
FCF margin 45% and ROIC 31% confirm business quality but Schloss did not pay up for quality
Entire investment thesis rests on AI/ETM growth narrative and earnings forecasts, not verifiable assets

Red flags

Trading at 52-week high — Schloss bought near multi-year lows, never at peaks
P/B of 7.74x is a rich-valuation red flag by Schloss standards
Multiple insider sales (CLO Posey, Director Pfeiffer) in June 2026 with no offsetting buying
Thesis depends on ETM adoption narrative, agentic AI, and forward growth — all forecast-dependent, not asset-based
Operating margin sustainability depends on continued SaaS subscription renewal, an intangible recurring revenue stream not anchored in hard assets
DCF upside of 117% is entirely model-driven; bear-case floor of $204 still implies 5x+ book value

Fact base appendix

Price

last_close: 123.27
as_of: 2026-06-27
high_52w: 123.27
low_52w: 123.27
pct_below_52w_high: 0.0

Fundamentals

last_price: 123.27
market_cap: 4341200506
fifty_two_week_high: 155.47
fifty_two_week_low: 74.51
beta: 0.6088755
currency: USD
exchange: NASDAQ NMS - GLOBAL MARKET
sector: Technology
industry: Technology
price_source: finnhub
bars: 1
entity: QUALYS, INC.
fiscal_year: 2025
revenue: 669125000
revenue_period: 2025-12-31
net_income: 198300000
net_income_period: 2025-12-31
operating_income: 221952000
operating_income_period: 2025-12-31
operating_cash_flow: 309400000
operating_cash_flow_period: 2025-12-31
capex: 4990000
capex_period: 2025-12-31
total_assets: 1095081000
total_assets_period: 2025-12-31
total_liabilities: 533928000
total_liabilities_period: 2025-12-31
current_assets: 657616000
current_assets_period: 2025-12-31
current_liabilities: 467338000
current_liabilities_period: 2025-12-31
stockholders_equity: 561153000
stockholders_equity_period: 2025-12-31
cash_and_equivalents: 250258000
cash_and_equivalents_period: 2025-12-31
shares_outstanding: 35675926
operating_margin: 0.3317
net_margin: 0.2964
roe: 0.3534
debt_to_equity: None
current_ratio: 1.4072
roic: 0.3125
free_cash_flow: 304410000
fcf_margin: 0.4549
pe_ratio: 21.89
price_to_fcf: 14.26
price_to_sales: 6.49
revenue_cagr: 0.1096
revenue_cagr_years: 3
fundamentals_source: edgar_companyfacts
price_to_book: 7.74
earnings_yield: 0.0543
peg: 2.0

Filings reviewed

8-K (2026-06-11) https://www.sec.gov/Archives/edgar/data/1107843/000110784326000024/qlys-20260610.htm
10-Q (2026-05-05) https://www.sec.gov/Archives/edgar/data/1107843/000110784326000015/qlys-20260331.htm
8-K (2026-05-05) https://www.sec.gov/Archives/edgar/data/1107843/000110784326000013/qlys-20260505.htm
10-K (2026-02-20) https://www.sec.gov/Archives/edgar/data/1107843/000110784326000008/qlys-20251231.htm
10-Q (2025-11-04) https://www.sec.gov/Archives/edgar/data/1107843/000110784325000038/qlys-20250930.htm
10-K (2025-02-21) https://www.sec.gov/Archives/edgar/data/1107843/000110784325000009/qlys-20241231.htm

Other sources

[news] Insider Sell: Bruce Posey Sells Shares of Qualys Inc (QLYS) - GuruFocus
[news] London Co. of Virginia Sells 66,300 Shares of Qualys, Inc. $QLYS - MarketBeat
[news] Clark Capital Management Group Inc. Purchases 291,192 Shares of Qualys, Inc. $QLYS - MarketBeat
[news] Qualys’s chief legal officer Bruce Posey sells $94,668 in shares - Investing.com
[news] Qualys director Wendy Pfeiffer sells $55,275 in company stock - Investing.com
[news] Qualys (QLYS) legal chief sells 865 shares under 10b5-1 trading plan - Stock Titan
[news] QUALYS (QLYS) director Wendy Pfeiffer sells 500 shares under Rule 10b5-1 plan - Stock Titan
[news] BI Asset Management Fondsmaeglerselskab A S Acquires 27,484 Shares of Qualys, Inc. $QLYS - MarketBeat
[news] Price to sales forward of Qualys, Inc. – NASDAQ:QLYS - TradingView
[news] 3L7A Forecast — Price Target — Prediction for 2027 - TradingView
[news] Price to earnings forward of Qualys, Inc. – FWB:3L7A - TradingView
[news] Qualys Inc. (NASDAQ:QLYS) Passes Peter Lynch GARP Screen as a Compelling Investment Opportunity - ChartMill
[news] QLYS (NASDAQ) Form 144: Insider reports 13,200 RSUs; prior 10b5-1 sales listed - Stock Titan
[news] Qualys, Inc. Actuals & Estimates (NASDAQ:QLYS) - TradingView
[news] QLYS News | QUALYS INC (NASDAQ:QLYS) - ChartMill
[discussion] [Bullish] $QLYS wow
[discussion] [Bullish] $QLYS breaking out of 4wt and pushing 200d
[discussion] [Bullish] $QLYS good look
[discussion] $QLYS 130 Call 7/17 at 1.35 🚨 (new avg)
[discussion] TRUST

$QLYS 130 Call 7/17 at 1.45

[discussion] $QLYS 130 CALL 7/17 1.45 🗻
[discussion] [Bullish] $QLYS broke the 105 I mentioned on 18May; now, hitting the wall at 115.3 with a minor chan
[discussion] @BustaCapital @WAJeff @IsabellaDC @Jblack500 @No_Face_character @cynicaloptimist $HYPE.X it $SMCI $
[discussion] [Bullish] $QLYS Mothly MacD pretty stretched. Kinda like
[discussion] [Bullish] New Analysis!!!
$QLYS

https://onlytradersfans.com/threads/analisis-qualys.10661/

[discussion] [Bullish] $QLYS what a boost
[discussion] [Bullish] $QLYS You want to see a break and hold above 105 to see a sustained rally. GL.
[discussion] $QLYS back on radar.
[discussion] $QLYS near 5yr lows
[discussion] $QLYS Current Stock Price: $90.90 Contracts to trade: $90.0 QLYS May 15 2026 Call Entry: $2.90 Exit:
[earnings_call] Qualys Q4 2025 Earnings Call

Generated 2026-07-17T20:40:32 · est. cost $1.46

QUALYS, INC. (QLYS) — Council Assessment

🟡 WATCH · Score 68/100 · medium confidence

360 narrative — news & sentiment digest

QLYS Investment Briefing

Management Commentary (Earnings Call)

Recent Developments

Bull Narrative

Bear Narrative

Retail Sentiment

Caveats

Summary

Bull case

Bear case

Dissent — where the council disagrees

Key risks

Catalysts

DCF valuation (finance-expert model)

Short-sell evaluation

Council scorecard

Member reasoning

Chuck Akre — 🟢 pass · 78/100 · high confidence

Valuation Referee (Damodaran-style) — 🟢 pass · 78/100 · medium confidence

Joel Greenblatt — 🟢 pass · 78/100 · high confidence

Charlie Munger — 🟢 pass · 78/100 · medium confidence

Terry Smith (Fundsmith) — 🟢 pass · 78/100 · high confidence

Warren Buffett — 🟢 pass · 75/100 · medium confidence

Bruce Greenwald — 🟢 pass · 74/100 · medium confidence

Michael Mauboussin — 🟢 pass · 74/100 · medium confidence

Ray Dalio — 🟢 pass · 72/100 · medium confidence

Forensic Short-Seller (Chanos/Einhorn-style) — 🟢 pass · 72/100 · medium confidence

AI & Disruption Referee (Christensen-style) — 🟢 pass · 72/100 · medium confidence

Philip Fisher — 🟡 watch · 58/100 · medium confidence

Howard Marks — 🟡 watch · 55/100 · medium confidence

Stanley Druckenmiller — 🟡 watch · 52/100 · medium confidence

Benjamin Graham — 🟡 watch · 52/100 · high confidence

Seth Klarman — 🟡 watch · 52/100 · medium confidence

Peter Lynch — 🟡 watch · 52/100 · medium confidence

Walter Schloss — 🔴 avoid · 22/100 · high confidence

Fact base appendix

Chuck Akre Quality

Valuation Referee (Damodaran-style) Referee

Joel Greenblatt Value

Charlie Munger Quality

Terry Smith (Fundsmith) Quality

Warren Buffett Quality

Bruce Greenwald Value

Michael Mauboussin Quality

Ray Dalio Risk

Forensic Short-Seller (Chanos/Einhorn-style) Referee

AI & Disruption Referee (Christensen-style) Referee

Philip Fisher Growth

Howard Marks Risk

Stanley Druckenmiller Risk

Benjamin Graham Value

Seth Klarman Value

Peter Lynch Growth

Walter Schloss Value