NEW YORK (TheStreet) -- Shares of Qualys Inc  (QLYS - Get Report) are taking a hit, sharply down 27.67% to $39.84 on heavy volume in early market trading Tuesday, after the cybersecurity company issued a lower than expected outlook late Monday.

Qualys forecast earnings of between 9 cents to 11 cents per share on revenue in a range of $39.5 million to $40 million for the second quarter. The consensus estimate calls for earnings of 13 cents per share for the period.

For the full year, the company expects earnings of between 50 cents to 55 cents per share on revenue in a range of $165 million to $166.5 million. The consensus estimate calls for earnings of 53 cents per share for the period.

RBC Capital lowered its price target on shares of Qualys this morning to $38 from $47 with a "sector perform" rating.

About 1.21 million shares have exchanged hands as of 10:02 a.m. ET today, compared to its average trading volume of about 454,051 shares a day.

Qualys is a provider of cloud security and compliance solutions that enable organizations to identify security risks to information technology infrastructures, help protect IT systems and applications from cyber-attacks and achieve compliance with internal policies and external regulations. 

The company is based in Redwood City, Calif.

Insight from TheStreet's Research Team:

James DePorre commented on Qualys in a recent post on Here is a snippet of what DePorre had to say about the stock:

The negatives have been quite obvious. First and foremost, the reaction to earnings reports has been generally poor. There are a few stocks moving on good news, but the more common scenario is Qualys (QLYS), which is gapping down this morning close to 25% after a poor report. The QLYS chart looked great yesterday as it was making new all-time highs.

There have been more than a few disasters like that this quarter, and it has hurt the mood of the market. We have typically done a nice job of shrugging off macro-negatives, as many stocks put up good numbers and the central bankers offer endless support. It is no longer quite as easy and, while we are holding, the pockets of momentum have been contracting and the level of chasing has declined.

It is very tempting to make big predictions about where the market is headed from here. At least if we make predictions, we can feel like we are doing something productive and we can trade with a higher level of conviction. It is much less boring when we have some theory that we can act upon.

The better approach is to simply stay patient and wait for the market to offer more solid clues as to where it is heading. That isn't very exciting when the action is choppy and sloppy, and not much of interest is coming up on the radar screens. In fact, it can feel like we are wasting time and not really doing what we should do.

- James DePorre, 'Wait for the Fat Pitches' originally published 5/5/2015 on

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