Qualys is Wednesday's pick for IBD 50 Growth Stocks To Watch as shares of the security software company are in buy range. Qualys stock now sits above a cup with handle with an entry at 154.85, according to IBD MarketSmith chart analysis.
Shares rose after Qualys offered strong second-quarter results in August to give the handle entry. Shares continue to hold support at the 50-day line ahead of the company's planned earnings on Nov. 2.
Qualys has a best-possible Composite Rating of 99 and a stellar EPS Rating of 98. Its Relative Strength Rating of 95 also shows the stock's superior performance.
The company has generated steady revenue that has grown in the range of 13% to 20% over the past eight quarters. Earnings growth ranged from 9% to 43% during the period. Earnings have been accelerating over the past four quarters.
Highest Increase In Earnings
During its most recent reporting period, Qualys said second-quarter sales grew 14% to $137.2 million. Earnings of $1.27 per share showed the highest increase for any of its recent quarters, growing 43%.
For the third quarter, the company expects revenue of $141 million at the midpoint, which represents 13% growth from the prior-year quarter. Its earnings was revised upward to a midpoint of $4.63 a share from an earlier estimate of $4.20.
Qualys stock ranks third in IBD's security software industry group. It sits just below CrowdStrike, a recent Stock Of The Day, and Palo Alto Networks. The group ranked 58th among IBD's 197 industry groups six weeks ago and has since moved up to 10th place.
In October 2022, the company purchased Blue Hexagon and acquired its AI and machine-learning assets that enable cloud threat detection and response.
Qualys Stock Nears All-Time High
The stock is approaching an all-time high of 162.36 and has gained 40% so far this year. The S&P 500 by comparison is up 11%.
Qualys provides cloud-based safety, compliance and information-technology services on a subscription basis.
Qualys has an Accumulation/Distribution Rating of B-, which is an indicator of good institutional support. A total of 64% of its outstanding shares are held by funds. Exchange traded funds hold shares of Qualys stock as well.
The iShares Core S&P Mid Cap ETF and the First Trust Nasdaq Cybersecurity ETF hold shares of Qualys stock.
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