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Why Qualys, Inc. Shares Tanked

By Daniel Sparks - Feb 9, 2016 at 12:17PM

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Understanding the big pullback in Qualys' stock price on Tuesday.

What: Shares of cloud security and compliance solutions provider Qualys (QLYS -2.46%) fell as much as much as 23.4% on Tuesday after the company reported worse-than-expected fourth-quarter sales, and lower-than-expected guidance for Q1. The stock's decline has recovered slightly to 21% at the time of this writing.

So what: The company's 22% year-over-year growth in fourth-quarter revenue wasn't quite enough in relation to what analysts were expecting. The consensus analyst estimate for Qualys' fourth-quarter revenue was $44.6 million; the company's actual revenue for the quarter was $44.4 million.

Similarly, the company's guidance for its first quarter was lower than expected. The company guided for first-quarter revenue and non-GAAP EPS in the ranges of $44.7 million to $45.4 million, and $0.14 to $0.16, respectively. The consensus analyst estimate for Qualys' first-quarter revenue and non-GAAP EPS was $46.3 million and $0.18, respectively.

Notably, Qualys' fourth-quarter non-GAAP EPS of $0.21 was ahead of analyst expectations for $0.17.

Now what: During the company's earnings call following the release, management said the company is factoring in some caution into its guidance regarding economic conditions and forex headwinds. Qualys CEO Philippe Courtot noted there is no fundamental change in the business.

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