9/10/24 - $qlys - probably a buy $120 but want $100

9월 10일

9/10/24 :: VROCKSTAR :: QLYS
probably a buy $120 but want $100

- previous note set the tgt sub $125 and here we are taking another look after the patience paid off
- but consistent w/ my ALRM note, the if/then price logic needs to be followed up by "what happened since" and the answer is "a lot"
- i think the MAIN issue already but increasingly in '25 for B2B software will be the impact of AI either internally, by listed comps and by start ups. the unknown unknown of this effect on EPS basically and probably means the street will underpay for multiple and overpay for actual results/ beats. so for a stock (such as this one) where the beats have been pretty well telegraphed/ meager and the growth is still a healthy double digits (but not much more), we will need to see a bit more juice
- as such, I think the logic here goes that ex-stock comp $200 mm of FCF on $4 bn of enterprise value (take out the net debt from the cap) gives you 5% yield. growing and assuming they keep pace w/ industry/ aren't disrupted by AI... that's great. it's a buy.
- but as of rn, there are many other alternatives, many of which that won't be disrupted by AI (or are leading the charge!) including pretty attractively priced large caps like META and GOOGL and my fav hardware name NXT. of course GDLC benefits and leads the charge on AI exchanging value with AI too - but that's for another thread.

- so TL;DR. all else equal, the stock is a buy. i don't need to own it, so i'm not going to buy it. i don't think i'll be missing out or feel any sort of FOMO if this one gets away from me, similar to my last post mortem note. i'd love it in the low 100s at this stage... if it ever gets there. otherwise i'm a pass and will root you on from the sidelines

V