Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 25 May 2026
QLYS· Technology
Qualys
Qualys boasts an impressive 83% gross margin and 29% ROIC, but valuation concerns and financial health raise red flags.
Buffett fit
Strong fit
Owner
99
Durability
98
Management
58
Price
49
Score updated 26 Sept 2026 · analysis from 25 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Qualys outright, I'd focus on maintaining its strong market position and enhancing its product offerings over the next 10 years.
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Qualys has shown consistent profitability over the last 5 years, with no EPS decline.
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Management has reduced the share count by 1.9% over the last 5 years, which indicates a commitment to returning value to shareholders.
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With an yield of 9.44%, the valuation seems reasonable but not compelling, especially considering the of 16.2.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 28.6% exceeds the sector's top-quintile cutoff of 10.7%, indicating strong capital efficiency.
- 2 of 83.1% places Qualys in the top quintile of the technology sector, showcasing its .
- 3Revenue CAGR of 12.95% over the last 5 years suggests solid growth potential.
- 4 of $304.41M is robust, with a FCF/Net Income ratio of 1.53 indicating strong cash generation.
Concerns
5- 1Financial health score of 24 raises concerns about stability, particularly with a current ratio of only 1.43.
- 2Net debt/EBITDA of -0.88 shows a strong cash position, but interest coverage of 0.0 is alarming and suggests reliance on cash flow.
- 3Valuation score of 49 indicates that the current price may not reflect a .
- 4 of 16.2 prices in growth expectations that may be too high given the 5-year EPS CAGR of 31.79%, which could lead to multiple compression.
Price history
$208+67.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Qualys generates cash through its cloud-based IT security and compliance solutions, with a TTM revenue of $669.13M and a net income of $198.32M. Its integrated suite allows customers to manage IT assets and security data efficiently. The business model's strength lies in its subscription-like revenue, providing recurring cash flow. The unit economics are solid, with a of 83.1%.
What other investors would say
The same company, judged by three other documented playbooks.
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