QUALYS INC (NASDAQ:QLYS) Appears as a Peter Lynch-Style Growth at a Reasonable Price Opportunity

In the current market setting, investors frequently have difficulty locating firms that merge steady expansion with fair prices. The Peter Lynch investment method gives a structured way to find these possibilities by concentrating on fundamentally healthy businesses with lasting growth potential. This approach highlights firms displaying good earnings expansion, high profitability, sound financial condition, and appealing prices compared to their growth path. By using these ideas, we can look at how Qualys Inc (NASDAQ:QLYS) appears as an interesting option for investors seeking growth at a fair price.

Growth and Price Matching

Qualys shows the kind of balanced growth pattern that Peter Lynch liked in his investment thinking. The firm's past results indicate significant enlargement without the extreme growth speeds that frequently become hard to maintain.

• Earnings Per Share Expansion: 21.24% average yearly expansion over five years
• PEG Ratio: 0.93 calculated on past five-year earnings expansion
• Sales Expansion: 13.57% average yearly expansion over past years

The PEG ratio under 1.0 is a fundamental part of the Lynch system, showing the stock could be fairly priced relative to its growth path. This measure accounts for growth by dividing the price-to-earnings ratio by the earnings expansion speed, with results under 1.0 hinting at possible under pricing. Qualys easily fits this requirement while keeping expansion inside Lynch's favored 15-30% span, steering clear of the unmaintainable extreme growth that often results in letdown.

Financial Condition and Earnings

Peter Lynch gave great importance to company monetary strength, choosing businesses with little borrowing and high earnings measures. Qualys performs well in these parts, showing the kind of operational effectiveness and balance sheet sturdiness that lowers investment danger.

• Return on Equity: 36.41%
• Debt/Equity Ratio: 0.0
• Current Ratio: 1.30
• Earnings Margin: 29.04%

The total lack of borrowing matches exactly with Lynch's careful way of looking at corporate financial setup. His liking for debt-to-equity ratios under 0.25 is greatly bettered by Qualys' no borrowing situation. At the same time, the outstanding return on equity of 36.41% is much higher than Lynch's 15% minimum, showing very effective use of owner money. These measures join to make a financially strong firm able to handle economic slumps while paying for future expansion from its own resources.

Basic Evaluation Summary

According to the detailed basic examination, Qualys gets 7 out of 10 in total, with especially high results in earnings (9/10) and financial condition (9/10). The firm places in the top groups of its software industry equals across several important measures, including return on invested capital (28.41%), operating margin (31.01%), and gross margin (81.84%). The price score of 5/10 shows a varied image, with some measures hinting at fair pricing while others point to higher costs. Expansion measures show strong past performance although with forecasts for slower enlargement in future years.

Investment Points

While Qualys fits many Peter Lynch requirements well, investors should be aware of several things. The firm's pricing gives a complicated image, with standard P/E ratios seeming fair next to industry equals but growth-adjusted measures hinting at fuller pricing. Future expansion forecasts point to a slowing from past speeds, with experts expecting about 6.33% yearly EPS expansion and 7.79% sales expansion going forward. This change from high growth to more measured enlargement is normal as firms get older and stands as a key point for long-term investors judging the maintainability of business results.

Finding Related Possibilities

For investors wanting to use the Peter Lynch system on other possible investments, our Peter Lynch Strategy screener gives often refreshed outcomes using these same investment rules. The screen finds firms with maintainable growth patterns, fair prices, high earnings, and healthy balance sheets, the basic parts of Lynch's proven method.

This article gives factual examination built on recorded investment systems and must not be seen as investment guidance. All investment choices must happen after complete personal study and thought of individual money situations. Past results do not ensure future outcomes, and all investments hold built-in dangers including possible loss of original money.