Intrinsic value of Qualys, Inc. - QLYS

Previous Close

$81.19

  Intrinsic Value

$29.04

stock screener

  Rating & Target

str. sell

-64%

Previous close

$81.19

 
Intrinsic value

$29.04

 
Up/down potential

-64%

 
Rating

str. sell

We calculate the intrinsic value of QLYS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.90
  16.61
  15.45
  14.40
  13.46
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
Revenue, $m
  329
  384
  443
  507
  575
  647
  724
  805
  890
  979
  1,072
  1,169
  1,270
  1,375
  1,484
  1,598
  1,716
  1,839
  1,966
  2,099
  2,237
  2,380
  2,530
  2,685
  2,847
  3,015
  3,191
  3,375
  3,566
  3,766
Variable operating expenses, $m
  238
  277
  319
  364
  413
  465
  520
  577
  638
  701
  765
  834
  906
  981
  1,059
  1,140
  1,225
  1,312
  1,403
  1,498
  1,596
  1,699
  1,805
  1,916
  2,031
  2,152
  2,277
  2,408
  2,545
  2,688
Fixed operating expenses, $m
  29
  29
  30
  31
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  41
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  53
  54
Total operating expenses, $m
  267
  306
  349
  395
  444
  497
  553
  610
  672
  736
  801
  870
  943
  1,019
  1,098
  1,180
  1,266
  1,353
  1,445
  1,541
  1,640
  1,744
  1,851
  1,963
  2,079
  2,201
  2,327
  2,459
  2,598
  2,742
Operating income, $m
  63
  78
  94
  112
  131
  151
  172
  194
  218
  243
  271
  298
  327
  356
  386
  418
  451
  485
  521
  558
  596
  637
  678
  722
  767
  814
  864
  915
  969
  1,025
EBITDA, $m
  82
  100
  119
  140
  163
  186
  212
  238
  266
  295
  326
  358
  391
  426
  462
  499
  538
  579
  621
  664
  710
  757
  807
  858
  912
  968
  1,026
  1,087
  1,150
  1,216
Interest expense (income), $m
  0
  0
  9
  19
  30
  41
  53
  66
  80
  94
  109
  125
  142
  159
  177
  196
  215
  235
  256
  278
  301
  325
  349
  375
  401
  429
  458
  488
  519
  552
  586
Earnings before tax, $m
  62
  68
  75
  82
  90
  98
  106
  115
  124
  133
  146
  157
  168
  179
  191
  203
  216
  229
  242
  257
  272
  287
  303
  320
  338
  356
  376
  396
  417
  439
Tax expense, $m
  17
  18
  20
  22
  24
  26
  29
  31
  33
  36
  40
  42
  45
  48
  51
  55
  58
  62
  65
  69
  73
  78
  82
  86
  91
  96
  101
  107
  112
  118
Net income, $m
  46
  50
  55
  60
  65
  71
  77
  84
  90
  97
  107
  114
  122
  131
  139
  148
  157
  167
  177
  187
  198
  210
  221
  234
  247
  260
  274
  289
  304
  320

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  578
  674
  778
  890
  1,010
  1,138
  1,273
  1,415
  1,564
  1,720
  1,884
  2,054
  2,232
  2,417
  2,609
  2,808
  3,016
  3,232
  3,456
  3,689
  3,931
  4,183
  4,446
  4,719
  5,003
  5,300
  5,609
  5,931
  6,268
  6,619
Adjusted assets (=assets-cash), $m
  578
  674
  778
  890
  1,010
  1,138
  1,273
  1,415
  1,564
  1,720
  1,884
  2,054
  2,232
  2,417
  2,609
  2,808
  3,016
  3,232
  3,456
  3,689
  3,931
  4,183
  4,446
  4,719
  5,003
  5,300
  5,609
  5,931
  6,268
  6,619
Revenue / Adjusted assets
  0.569
  0.570
  0.569
  0.570
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
Average production assets, $m
  84
  97
  112
  129
  146
  164
  184
  204
  226
  249
  272
  297
  323
  349
  377
  406
  436
  467
  499
  533
  568
  605
  642
  682
  723
  766
  811
  857
  906
  957
Working capital, $m
  -126
  -147
  -170
  -194
  -220
  -248
  -277
  -308
  -341
  -375
  -411
  -448
  -486
  -527
  -569
  -612
  -657
  -704
  -753
  -804
  -857
  -912
  -969
  -1,028
  -1,090
  -1,155
  -1,222
  -1,293
  -1,366
  -1,443
Total debt, $m
  42
  86
  134
  186
  241
  300
  362
  428
  496
  569
  644
  722
  804
  889
  978
  1,070
  1,166
  1,265
  1,369
  1,476
  1,588
  1,704
  1,825
  1,951
  2,082
  2,219
  2,361
  2,510
  2,665
  2,827
Total liabilities, $m
  267
  311
  359
  410
  466
  524
  587
  652
  721
  793
  868
  947
  1,029
  1,114
  1,203
  1,295
  1,390
  1,490
  1,593
  1,701
  1,812
  1,928
  2,049
  2,175
  2,306
  2,443
  2,586
  2,734
  2,890
  3,052
Total equity, $m
  312
  363
  419
  480
  545
  613
  686
  763
  843
  927
  1,015
  1,107
  1,203
  1,303
  1,406
  1,514
  1,626
  1,742
  1,863
  1,988
  2,119
  2,255
  2,396
  2,543
  2,697
  2,857
  3,023
  3,197
  3,378
  3,568
Total liabilities and equity, $m
  579
  674
  778
  890
  1,011
  1,137
  1,273
  1,415
  1,564
  1,720
  1,883
  2,054
  2,232
  2,417
  2,609
  2,809
  3,016
  3,232
  3,456
  3,689
  3,931
  4,183
  4,445
  4,718
  5,003
  5,300
  5,609
  5,931
  6,268
  6,620
Debt-to-equity ratio
  0.130
  0.240
  0.320
  0.390
  0.440
  0.490
  0.530
  0.560
  0.590
  0.610
  0.630
  0.650
  0.670
  0.680
  0.700
  0.710
  0.720
  0.730
  0.730
  0.740
  0.750
  0.760
  0.760
  0.770
  0.770
  0.780
  0.780
  0.790
  0.790
  0.790
Adjusted equity ratio
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539
  0.539

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  46
  50
  55
  60
  65
  71
  77
  84
  90
  97
  107
  114
  122
  131
  139
  148
  157
  167
  177
  187
  198
  210
  221
  234
  247
  260
  274
  289
  304
  320
Depreciation, amort., depletion, $m
  20
  22
  25
  29
  32
  36
  40
  44
  48
  53
  54
  59
  65
  70
  75
  81
  87
  93
  100
  107
  114
  121
  128
  136
  145
  153
  162
  171
  181
  191
Funds from operations, $m
  65
  72
  80
  89
  98
  107
  117
  127
  139
  150
  161
  174
  187
  200
  215
  229
  245
  260
  277
  294
  312
  331
  350
  370
  391
  413
  436
  460
  485
  512
Change in working capital, $m
  -19
  -21
  -23
  -24
  -26
  -28
  -29
  -31
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -77
Cash from operations, $m
  84
  93
  103
  113
  124
  135
  146
  158
  171
  184
  197
  211
  226
  241
  256
  273
  290
  307
  326
  345
  365
  386
  407
  430
  453
  478
  504
  531
  559
  588
Maintenance CAPEX, $m
  -14
  -17
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -45
  -50
  -54
  -59
  -65
  -70
  -75
  -81
  -87
  -93
  -100
  -107
  -114
  -121
  -128
  -136
  -145
  -153
  -162
  -171
  -181
New CAPEX, $m
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
Cash from investing activities, $m
  -27
  -31
  -34
  -38
  -43
  -47
  -52
  -58
  -63
  -68
  -74
  -79
  -85
  -92
  -98
  -104
  -111
  -118
  -125
  -134
  -142
  -150
  -159
  -167
  -177
  -188
  -198
  -209
  -220
  -232
Free cash flow, $m
  57
  63
  68
  74
  81
  87
  94
  101
  109
  116
  124
  132
  141
  149
  159
  168
  179
  189
  200
  211
  223
  235
  248
  262
  276
  290
  306
  322
  339
  356
Issuance/(repayment) of debt, $m
  40
  44
  48
  52
  55
  59
  62
  66
  69
  72
  75
  79
  82
  85
  89
  92
  96
  99
  103
  107
  112
  116
  121
  126
  131
  137
  143
  149
  155
  162
Issuance/(repurchase) of shares, $m
  2
  2
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  42
  46
  49
  52
  55
  59
  62
  66
  69
  72
  75
  79
  82
  85
  89
  92
  96
  99
  103
  107
  112
  116
  121
  126
  131
  137
  143
  149
  155
  162
Total cash flow (excl. dividends), $m
  100
  109
  118
  126
  136
  146
  156
  167
  177
  188
  199
  210
  222
  235
  247
  261
  274
  288
  303
  319
  335
  352
  369
  388
  407
  427
  448
  470
  494
  518
Retained Cash Flow (-), $m
  -47
  -52
  -56
  -60
  -65
  -69
  -73
  -77
  -80
  -84
  -88
  -92
  -96
  -100
  -104
  -108
  -112
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -153
  -160
  -167
  -174
  -181
  -189
Prev. year cash balance distribution, $m
  93
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  146
  57
  62
  66
  71
  77
  83
  90
  97
  104
  111
  119
  127
  135
  144
  153
  162
  172
  182
  193
  204
  216
  228
  240
  254
  267
  282
  297
  312
  329
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  140
  52
  54
  54
  55
  56
  56
  56
  56
  55
  53
  51
  48
  45
  42
  39
  35
  32
  28
  25
  21
  18
  15
  12
  10
  8
  6
  5
  3
  2
Current shareholders' claim on cash, %
  99.9
  99.9
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8

Qualys, Inc. is a provider of cloud-based security and compliance solutions. The Company's solutions enable organizations to identify security risks to their information technology (IT) infrastructures, help protect their IT systems and applications from cyber-attacks. Its suite of security and compliance solutions delivered on its Qualys Cloud Platform enables its customers to identify their IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend remediation actions and verify the implementation of such actions. Its Qualys Cloud Platform consists of a suite of IT security and compliance solutions. The Qualys Cloud Suite includes solutions, such as Vulnerability Management, Continuous Monitoring, Cloud Agent, AssetView, ThreatPROTECT, Policy Compliance, Payment Card Industry Compliance, Security Assessment Questionnaire, Web Application Scanning and Web Application Firewall. It provides its solutions through a software-as-a-service model.

FINANCIAL RATIOS  of  Qualys, Inc. (QLYS)

Valuation Ratios
P/E Ratio 153.1
Price to Sales 14.7
Price to Book 11.3
Price to Tangible Book
Price to Cash Flow 42.8
Price to Free Cash Flow 64.7
Growth Rates
Sales Growth Rate 20.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15%
Cap. Spend. - 3 Yr. Gr. Rate 10.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.2%
Ret/ On Assets - 3 Yr. Avg. 8%
Return On Total Capital 8.4%
Ret/ On T. Cap. - 3 Yr. Avg. 13.7%
Return On Equity 8.4%
Return On Equity - 3 Yr. Avg. 13.7%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 78.3%
Gross Margin - 3 Yr. Avg. 78.6%
EBITDA Margin 23.7%
EBITDA Margin - 3 Yr. Avg. 21.1%
Operating Margin 15.2%
Oper. Margin - 3 Yr. Avg. 12.6%
Pre-Tax Margin 15.2%
Pre-Tax Margin - 3 Yr. Avg. 12.4%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 13.9%
Effective Tax Rate 36.7%
Eff/ Tax Rate - 3 Yr. Avg. -53.6%
Payout Ratio 0%

QLYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QLYS stock intrinsic value calculation we used $279 million for the last fiscal year's total revenue generated by Qualys, Inc.. The default revenue input number comes from 0001 income statement of Qualys, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our QLYS stock valuation model: a) initial revenue growth rate of 17.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for QLYS is calculated based on our internal credit rating of Qualys, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Qualys, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of QLYS stock the variable cost ratio is equal to 72.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $28 million in the base year in the intrinsic value calculation for QLYS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 22% for Qualys, Inc..

Corporate tax rate of 27% is the nominal tax rate for Qualys, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the QLYS stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for QLYS are equal to 25.4%.

Life of production assets of 2.8 years is the average useful life of capital assets used in Qualys, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for QLYS is equal to -38.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $357.989 million for Qualys, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 39.092 million for Qualys, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Qualys, Inc. at the current share price and the inputted number of shares is $3.2 billion.

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