Core Insights - Qualys Inc (NASDAQ:QLYS) is recognized as one of the best AI stocks to buy, particularly noted for its Agentic AI solutions in cybersecurity [1] - The company recently experienced a stock price increase following positive financial results and raised guidance, leading to multiple upgrades from Wall Street analysts [2] Company Overview - Qualys provides cybersecurity and compliance solutions that help clients identify, prioritize, and remediate IT infrastructure risks [3] - The company operates on a software-as-a-service model with renewable annual subscriptions, which supports sustainable growth in the cybersecurity sector [3] Financial Performance - Qualys has demonstrated high operating margins and growing cash flow generation, alongside a strong balance sheet [3] - The Managed Risk Operation Center is reportedly seeing faster commercial deployments than previously anticipated by management [2] Market Position - Qualys is considered well-managed within the industry, with strategic decisions that have enhanced product quality, margins, and competitive advantages [3] - The company's products are viewed as critical yet low-cost relative to overall security budgets, contributing to high retention rates and resilience during economic downturns [3]

Core Insights - Tenable Holdings, Inc. specializes in vulnerability management within the cybersecurity sector, competing with companies like Rapid7, Varonis Systems, Qualys, Elastic N.V., and Smartsheet [1] Financial Performance - Tenable's Return on Invested Capital (ROIC) is -0.97%, which is below its Weighted Average Cost of Capital (WACC) of 7.12%, indicating inefficient capital utilization [2][5] - In contrast, Rapid7 has a positive ROIC of 0.79% against a WACC of 5.36%, demonstrating better capital efficiency [2] - Varonis Systems shows a strong performance with a ROIC of 9% and a WACC of 6.18%, resulting in a ROIC to WACC ratio of 1.45, indicating effective capital use [3] - Qualys leads the sector with a ROIC of 28% and a WACC of 6.32%, achieving a ROIC to WACC ratio of 4.42, highlighting its superior capital efficiency [3][5] - Both Elastic N.V. and Smartsheet have negative ROICs, with Elastic at -64.50% and Smartsheet at -2.84%, suggesting challenges in generating returns above their cost of capital [4][5]

Core Insights - Expedia was the best-performing stock in the S&P 500, surging over 17% after reporting better-than-expected earnings driven by strong domestic demand [1][7][8] - Take-Two Interactive Software's stock fell 8% due to the delay in the launch of "Grand Theft Auto VI," overshadowing its stronger-than-expected earnings [4][8] - Block's shares dropped nearly 8% after missing third-quarter sales and adjusted profit forecasts, despite growth from its Cash App platform [5] - Tesla's stock decreased close to 4% following the approval of a significant pay package for CEO Elon Musk, which could be worth $1 trillion based on performance goals [6] - Akamai Technologies saw its shares rise nearly 15% after reporting better-than-expected earnings and boosting its outlook, driven by strong demand for its security and cloud services [9] - Solventum, a healthcare company spun off from 3M, exceeded expectations with its quarterly sales and adjusted profit, leading to an 8% increase in its shares [10] Market Overview - Major U.S. equity indexes finished mixed, with the Dow up 0.2% and S&P 500 up 0.1%, while the Nasdaq dropped 0.2%, marking its worst week since early April [2][3] - The Michigan Consumer Sentiment Index fell to its lowest level since June 2022, indicating negative impacts from the U.S. government shutdown on economic perceptions [2]

Core Insights - Akamai Technologies Inc. reported better-than-expected third-quarter results, leading to a 10% increase in share price during intra-day trading [1] - The company raised its full-year outlook, indicating strong growth potential [3] Financial Performance - Adjusted earnings per share for the third quarter were $1.86, exceeding analyst estimates of $1.64 [1] - Revenue for the quarter reached $1.055 billion, surpassing expectations of $1.04 billion, representing a 5% year-over-year increase or 4% on a constant-currency basis [1] - For 2025, Akamai raised its revenue outlook to between $4.178 billion and $4.198 billion, and adjusted EPS guidance to $6.93–$7.13, both exceeding consensus projections [3] Business Segments - The security business drove growth with revenue up 10% year-over-year to $568 million [2] - Cloud Infrastructure Services revenue surged 39% to $81 million [2] - Content delivery revenue fell 4% to $306 million [2] Future Guidance - The company forecasts fourth-quarter revenue between $1.065 billion and $1.085 billion, with adjusted earnings per share expected in the range of $1.65–$1.85, both at or above market expectations [2]

Core Viewpoint - A class action securities lawsuit has been filed against Fortinet, Inc. for alleged securities fraud affecting investors between November 8, 2024, and August 6, 2025 [1][2]. Group 1: Lawsuit Details - The lawsuit claims that Fortinet's management made false statements regarding the refresh cycle of their products, suggesting it would be more profitable than it actually was, as it involved old products that represented a "small percentage" of the company's business [2]. - It is alleged that Fortinet misrepresented the number of FortiGate firewalls eligible for upgrades and that the company had pushed through approximately half of the refresh in just a few months, contrary to claims of a two-year momentum [2]. Group 2: Investor Information - Investors who suffered losses during the specified timeframe have until November 21, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require this role [3]. - Class members may be entitled to compensation without any out-of-pocket costs or fees, indicating no financial obligation to participate in the lawsuit [3]. Group 3: Legal Firm Background - Levi & Korsinsky, LLP has a history of securing hundreds of millions of dollars for shareholders and is recognized as one of the top securities litigation firms in the United States, with over 70 employees dedicated to serving clients [4].

Core Insights - CyberArk Software Ltd. reported better-than-expected quarterly results with expanding subscription revenue, indicating strong business fundamentals despite acquisition-related costs impacting free cash flow ahead of its merger with Palo Alto Networks [1] Financial Performance - CyberArk's revenue reached $342.8 million, operating profit was $64.8 million, and EPS was $1.20, surpassing estimates of $338.3 million, $54.3 million, and $1.04 respectively [2] - Subscription revenue increased by 60% year-over-year to $280.1 million, now accounting for 82% of total revenue, while total recurring revenue rose 46% year-over-year to $326.3 million, representing 95% of total revenue [3] Free Cash Flow - Free cash flow was reported at $42.4 million with a 12% margin, below estimates of $66.3 million and a 20% margin; adjusted for acquisition-related costs, FCF improved to $51.3 million, or a 15% margin [4] Annual Recurring Revenue (ARR) - Total annual recurring revenue (ARR) was $1.341 billion, up 45% year-over-year, exceeding expectations of $1.334 billion; total net new ARR (NNARR) was $67 million, a 16% increase year-over-year [5] - Subscription ARR stood at $1.16 billion, representing 86% of total ARR, up 58% year-over-year, while subscription NNARR reached $70 million, up 21% year-over-year [6] Updated Forecasts - D.A. Davidson updated its 2025 and 2026 estimates, projecting 2025 EPS of $4.48 and revenue of $1.36 billion, increasing to $5.56 EPS and $1.58 billion in revenue for 2026 [7]

Group 1 - Cloudflare stock has experienced a decline, falling below a buy point after a strong earnings-fueled breakout on October 31 [2][5] - The stock is currently on track for a fifth consecutive loss, but may find support at its 50-day moving average [2] - Cloudflare has received a composite rating upgrade, indicating improved performance metrics [5] Group 2 - The broader market has pulled back, affecting several stocks, including Cloudflare [2] - Amazon and Apple are leading the earnings winners, contributing to a rise in Dow Jones futures [5] - The focus is shifting towards 2026 outlooks for cybersecurity stocks as earnings reports approach [5]

Core Insights - Fortinet (FTNT) has seen a decline of -6.3% recently, while Microsoft (MSFT) is positioned as a more favorable investment option due to stronger revenue growth, enhanced profitability, and lower valuation [1][3] Company Performance Comparison - Microsoft has demonstrated a quarterly revenue growth of 18.4% and a 12-month revenue growth of 15.6%, outperforming Fortinet's 13.6% and 14.5% respectively [6] - In terms of profitability, Microsoft boasts a Last Twelve Months (LTM) margin of 46.3% and a 3-year average margin of 44.6%, indicating superior profitability compared to Fortinet [6] Market Trends and Positioning - Microsoft is recognized as a foundational technology player with strong momentum in artificial intelligence, cloud computing, and enterprise software partnerships, showing resilience during market volatility [3] - Fortinet is primarily focused on cybersecurity solutions but is more vulnerable to fluctuations in IT spending cycles and specific product demand, which has affected its stock performance [3]

Financial Data and Key Metrics Changes - In Q3 2025, revenues increased to $363.7 million, up nearly 3% from $353.6 million in the prior year [16] - Adjusted EBITDA for Q3 2025 was $124.1 million, a slight decline of less than 1% from $124.7 million year-over-year [17] - Adjusted diluted EPS rose by more than 7% to $1.76 from $1.64 in Q3 2024, aided by share buybacks that reduced the weighted average diluted shares by 7.5% [17][25] Business Line Data and Key Metrics Changes - Tech and shopping revenue fell by 2% in Q3, with adjusted EBITDA down 12%, primarily due to the wind down of game publishing activities [8][19] - Health and wellness segment saw a 13% year-over-year revenue growth and 18% adjusted EBITDA growth, marking high watermarks for the division [10] - Cybersecurity and martech revenue grew by 2% in Q3, driven by strong performance in consumer VPN and cloud backup [12] Market Data and Key Metrics Changes - The connectivity division achieved 2% year-over-year revenue growth, with year-to-date revenues up 7% [11] - Gaming and entertainment revenues were approximately 4% lower year-over-year, but adjusted EBITDA grew nearly 3% [9] - Advertising and performance marketing revenues grew by 5.9% year-over-year, while subscription and licensing revenues increased by 2% [18] Company Strategy and Development Direction - The company is evaluating potential opportunities to unlock shareholder value, having engaged outside advisors for this purpose [4][5] - There is a focus on maximizing value for shareholders while maintaining a profitable and growing business structure [5][26] - The company is committed to a disciplined acquisition strategy, having closed seven acquisitions in the first nine months of 2025 [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the disconnect between the current market value and intrinsic value of the company is at its widest [29] - The company anticipates fiscal year 2025 total revenues and adjusted diluted EPS to be within the lower half of its guidance range [24] - Management expressed optimism about the performance of various segments despite broader industry headwinds [39] Other Important Information - The company has significant cash reserves of $503.4 million and long-term investments of $119.6 million, with a gross leverage of 1.7 times trailing 12 months adjusted EBITDA [22] - Free cash flow for Q3 2025 was $108.2 million, representing a 35% increase year-over-year [25] - The company plans to continue its stock repurchase program, having repurchased 3 million shares year-to-date [23] Q&A Session Summary Question: Insights on valuation disconnect - Management acknowledged the valuation disconnect and noted that the recent segment-level disclosures have attracted interest from strategic and private equity investors [28][29] Question: Strategic review and potential divestitures - Management stated that no specific properties are off-limits for divestiture, but exploring opportunities for select units is likely to be more value-accretive [31] Question: Impact of AI on traffic and revenue - Management indicated that the company is well-positioned against fluctuations in search traffic, with only 35% of total revenue dependent on web traffic [32] Question: Future M&A opportunities - Management expressed optimism about acquiring smaller properties that may not have weathered recent market changes as well as continuing to buy back shares [44][45] Question: Philosophical shift in acquisitions - Management clarified that the focus remains on cash-on-cash returns and that there is no change in the overall approach to acquisitions [51]

Core Insights - Geopolitics and security have evolved beyond physical threats to encompass digital realms, affecting software and cloud environments [1] Group 1 - The nature of geopolitical and security threats now includes online and software vulnerabilities, indicating a shift in focus from traditional material harm [1]