What Happened?
Shares of cybersecurity cloud platform provider Qualys (NASDAQ: QLYS) fell 13.4% in the afternoon session after the company issued a weak financial forecast for the full year 2026, signaling slowing growth.
The company's adjusted earnings per share (EPS) guidance for the upcoming year, with a midpoint of $7.31, missed analyst estimates. This was compounded by revenue guidance that pointed to a slowdown. For the upcoming first quarter, management guided for an 8.5% year-on-year sales increase, a deceleration from the 10.1% growth reported in the most recent quarter. Analysts also expect revenue growth to slow over the next twelve months. The combination of a weaker-than-expected earnings outlook and decelerating revenue growth appeared to disappoint investors.
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What Is The Market Telling Us
Qualys’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Qualys and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 6.3% on the news that fears of disruption from artificial intelligence spooked investors, leading to a broad-based sell-off.
The market witnessed a "basket-style reaction," a term for when investors reduce exposure to an entire segment without differentiating between individual company business models. The negative sentiment was widespread, pulling down all of the Magnificent Seven stocks and sending the S&P 500 Information Technology Sector down nearly 3%.
Qualys is down 15.7% since the beginning of the year, and at $110.42 per share, it is trading 28.2% below its 52-week high of $153.80 from November 2025. Investors who bought $1,000 worth of Qualys’s shares 5 years ago would now be looking at an investment worth $870.86.
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