Qualys, Inc. (QLYS): A Bull Case Theory

We came across a bullish thesis on Qualys, Inc. on Asymmetric Edge’s Substack. In this article, we will summarize the bulls’ thesis on QLYS. Qualys, Inc.'s share was trading at $140.85 as of November 28th. QLYS’s trailing and forward P/E were 27.30 and 19.23 respectively according to Yahoo Finance.

Qualys, Inc. (QLYS) is a leading provider of cloud-based IT security and compliance solutions, offering a comprehensive platform that helps organizations identify vulnerabilities, ensure regulatory compliance, and protect digital assets. Founded in 1999, the company operates a cloud-native platform with flagship offerings such as Vulnerability Management, Detection and Response (VMDR), a Cloud Agent Platform, Web Application Scanning, Container Security, Cloud Security Posture Management, and Endpoint Detection and Response. These solutions provide real-time visibility and automated risk mitigation across diverse IT environments, making Qualys a critical partner for organizations navigating complex cybersecurity challenges.

The cybersecurity market, currently valued at $273.5 billion in 2024 and expected to grow to $600 billion by 2030, is being driven by rising cyber threats, cloud adoption, regulatory pressures, digital transformation, and a shortage of skilled cybersecurity professionals. Qualys is well-positioned to capitalize on these trends through its subscription-based revenue model, which ensures stable and predictable income, strong customer retention, and recurring growth.

In 2024, the company generated $608 million in revenue, achieving 12% growth, with gross margins above 80% and operating and net income margins of 28%. Free cash flow reached $232 million, or 38% of revenue, reflecting operational efficiency and providing flexibility for R&D, strategic acquisitions, or shareholder returns.

Qualys’ strong profitability, robust cash generation, and integrated cloud-native platform make it a compelling investment opportunity in a rapidly expanding industry. While competition and evolving threats pose challenges, the company’s scalable model, high margins, and critical role in digital security create a favorable risk/reward profile. With market conditions presenting an attractive entry point, QLYS offers investors exposure to long-term growth in cybersecurity with durable operational and financial strength.

Previously we covered a bullish thesis on Qualys, Inc. (QLYS) by Na’s Substack in May 2025, which highlighted the company’s strong SaaS-based recurring revenue, high profitability, and free cash flow generation. The company's stock price has appreciated approximately by 11.06% since our coverage. The thesis still stands as Qualys remains a leading cloud-native cybersecurity provider. Asymmetric Edge shares a similar perspective but emphasizes broader market trends and platform offerings.

Qualys, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held QLYS at the end of the second quarter which was 30 in the previous quarter. While we acknowledge the potential of QLYS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.