Two Profitable Stocks to Watch: Adobe and Coinbase, One to Sell: Qualys

Qualys (QLYS) is a profitable company with a 31.2% trailing 12-month GAAP operating margin, but its average billings growth of 5.2% over the last year and estimated sales growth of 6.6% for the next 12 months are underwhelming. Adobe (ADBE) stands out with a 36.4% operating margin and 89.2% gross margin, while Coinbase (COIN) has seen customer spending rise by 58.2% annually and EPS growth of 64.5%.

Qualys, Inc. (NASDAQ: QLYS) has been a profitable company, boasting a 31.2% trailing 12-month GAAP operating margin. However, its average billings growth of 5.2% over the last year and estimated sales growth of 6.6% for the next 12 months are underwhelming compared to other tech giants. Adobe (ADBE) stands out with a 36.4% operating margin and 89.2% gross margin, while Coinbase (COIN) has seen customer spending rise by 58.2% annually and EPS growth of 64.5%.

Qualys, despite its strong operating margin, has faced a 2.5% drop in share price over the past year, with a 23% increase over the last five years. This underperformance can be attributed to the broader market's cautious sentiment towards the stock. Over the same period, Qualys achieved compound earnings per share (EPS) growth of 21% per year, indicating a more impressive fundamental trend than its share price gain of 4% [1].

Adobe, on the other hand, has maintained robust financial health with a high operating margin and gross margin. This financial resilience is reflected in its strong EPS growth and revenue performance. Coinbase, a cryptocurrency platform, has seen significant growth in customer spending and EPS, driven by stablecoin growth and institutional support. Coinbase's earnings report for the first quarter of fiscal 2025 showed $2 billion in quarterly revenue and $527 million of adjusted net income [3].

In conclusion, while Qualys has shown strong fundamental trends, its relatively low sales growth compared to other tech giants like Adobe and Coinbase may limit its long-term potential. Investors should consider the broader market sentiment and the company's fundamental data when evaluating Qualys. Adobe and Coinbase, with their impressive margins and growth rates, present compelling investment opportunities.

References:
[1] https://finance.yahoo.com/news/qualys-nasdaq-qlys-earnings-growth-100428430.html
[2] https://www.investing.com/news/earnings/trelleborg-q2-sales-fall-2-as-auto-demand-slows-profit-margin-improves-4139621
[3] https://finance.yahoo.com/news/coinbase-fire-sustained-big-money-100859069.html