Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:QTWO - US74736L1098 - Common Stock
73.22 USD
+2.21 (+3.11%)
73.15 USD
-0.07 (-0.1%)
We assign a fundamental rating of 5 out of 10 to QTWO. QTWO was compared to 281 industry peers in the Software industry. Both the profitability and the financial health of QTWO get a neutral evaluation. Nothing too spectacular is happening here. QTWO is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year QTWO was profitable.
QTWO had a positive operating cash flow in the past year.
In the past 5 years QTWO always reported negative net income.
QTWO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 2.22%, QTWO is doing good in the industry, outperforming 64.41% of the companies in the same industry.
QTWO has a Return On Equity of 5.09%. This is in the better half of the industry: QTWO outperforms 69.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 3.00%, QTWO is in the better half of the industry, outperforming 69.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.22% | ||
| ROE | 5.09% | ||
| ROIC | 3% |
ROA(3y)-5.5%
ROA(5y)-6.87%
ROE(3y)-16.01%
ROE(5y)-17.84%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 4.12%, QTWO is doing good in the industry, outperforming 64.41% of the companies in the same industry.
With a decent Operating Margin value of 3.43%, QTWO is doing good in the industry, outperforming 66.55% of the companies in the same industry.
QTWO's Gross Margin of 53.37% is on the low side compared to the rest of the industry. QTWO is outperformed by 67.26% of its industry peers.
QTWO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.43% | ||
| PM (TTM) | 4.12% | ||
| GM | 53.37% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.1%
GM growth 5Y0.97%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), QTWO is destroying value.
QTWO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for QTWO has been increased compared to 5 years ago.
The debt/assets ratio for QTWO has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.27 indicates that QTWO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.27, QTWO is doing good in the industry, outperforming 63.35% of the companies in the same industry.
There is no outstanding debt for QTWO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 3.22 | ||
| Altman-Z | 3.27 |
ROIC/WACC0.29
WACC10.34%
2.3 Liquidity
QTWO has a Current Ratio of 0.97. This is a bad value and indicates that QTWO is not financially healthy enough and could expect problems in meeting its short term obligations.
QTWO has a worse Current ratio (0.97) than 76.16% of its industry peers.
A Quick Ratio of 0.97 indicates that QTWO may have some problems paying its short term obligations.
With a Quick ratio value of 0.97, QTWO is not doing good in the industry: 74.73% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 71.97% over the past year.
The Earnings Per Share has been growing by 33.28% on average over the past years. This is a very strong growth
QTWO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.93%.
The Revenue has been growing by 17.16% on average over the past years. This is quite good.
EPS 1Y (TTM)71.97%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%45.45%
Revenue 1Y (TTM)13.93%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%15.25%
3.2 Future
Based on estimates for the next years, QTWO will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.47% on average per year.
Based on estimates for the next years, QTWO will show a quite strong growth in Revenue. The Revenue will grow by 11.67% on average per year.
EPS Next Y39.32%
EPS Next 2Y23.9%
EPS Next 3Y19.47%
EPS Next 5YN/A
Revenue Next Year13.39%
Revenue Next 2Y11.96%
Revenue Next 3Y11.67%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
QTWO is valuated quite expensively with a Price/Earnings ratio of 32.26.
Compared to the rest of the industry, the Price/Earnings ratio of QTWO indicates a somewhat cheap valuation: QTWO is cheaper than 61.92% of the companies listed in the same industry.
QTWO is valuated rather expensively when we compare the Price/Earnings ratio to 26.37, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 29.08, which means the current valuation is very expensive for QTWO.
QTWO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 60.14% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (36.20), we can say QTWO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.26 | ||
| Fwd PE | 29.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, QTWO is valued a bit cheaper than the industry average as 61.92% of the companies are valued more expensively.
70.46% of the companies in the same industry are more expensive than QTWO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.8 | ||
| EV/EBITDA | 51.26 |
4.3 Compensation for Growth
QTWO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as QTWO's earnings are expected to grow with 19.47% in the coming years.
PEG (NY)0.82
PEG (5Y)0.97
EPS Next 2Y23.9%
EPS Next 3Y19.47%
5. Dividend
5.1 Amount
QTWO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
73.22
+2.21 (+3.11%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners106.25%
Inst Owner Change5.88%
Ins Owners0.5%
Ins Owner Change-1.91%
Market Cap4.58B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target90.7 (23.87%)
Short Float %5.81%
Short Ratio3.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.04%
Min EPS beat(2)7.29%
Max EPS beat(2)14.78%
EPS beat(4)4
Avg EPS beat(4)11.25%
Min EPS beat(4)7.29%
Max EPS beat(4)14.78%
EPS beat(8)7
Avg EPS beat(8)9.45%
EPS beat(12)10
Avg EPS beat(12)19.61%
EPS beat(16)13
Avg EPS beat(16)29.39%
Revenue beat(2)0
Avg Revenue beat(2)-0.65%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.06%
Revenue beat(4)0
Avg Revenue beat(4)-0.48%
Min Revenue beat(4)-1.24%
Max Revenue beat(4)-0.06%
Revenue beat(8)0
Avg Revenue beat(8)-0.77%
Revenue beat(12)0
Avg Revenue beat(12)-1.17%
Revenue beat(16)0
Avg Revenue beat(16)-1.38%
PT rev (1m)-13.6%
PT rev (3m)-13.26%
EPS NQ rev (1m)3.78%
EPS NQ rev (3m)3.62%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)0.64%
Revenue NQ rev (3m)0.63%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.26 | ||
| Fwd PE | 29.08 | ||
| P/S | 5.95 | ||
| P/FCF | 29.8 | ||
| P/OCF | 25.32 | ||
| P/B | 7.35 | ||
| P/tB | 165.29 | ||
| EV/EBITDA | 51.26 |
EPS(TTM)2.27
EY3.1%
EPS(NY)2.52
Fwd EY3.44%
FCF(TTM)2.46
FCFY3.36%
OCF(TTM)2.89
OCFY3.95%
SpS12.31
BVpS9.96
TBVpS0.44
PEG (NY)0.82
PEG (5Y)0.97
Graham Number22.56
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.22% | ||
| ROE | 5.09% | ||
| ROCE | 3.8% | ||
| ROIC | 3% | ||
| ROICexc | 16.52% | ||
| ROICexgc | N/A | ||
| OM | 3.43% | ||
| PM (TTM) | 4.12% | ||
| GM | 53.37% | ||
| FCFM | 19.96% |
ROA(3y)-5.5%
ROA(5y)-6.87%
ROE(3y)-16.01%
ROE(5y)-17.84%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.1%
GM growth 5Y0.97%
F-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 3.22 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 47.78% | ||
| Cap/Sales | 3.53% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 217.07% | ||
| Profit Quality | 484.18% | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 3.27 |
F-Score7
WACC10.34%
ROIC/WACC0.29
Cap/Depr(3y)44.55%
Cap/Depr(5y)45.59%
Cap/Sales(3y)4.8%
Cap/Sales(5y)5.13%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)71.97%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%45.45%
EPS Next Y39.32%
EPS Next 2Y23.9%
EPS Next 3Y19.47%
EPS Next 5YN/A
Revenue 1Y (TTM)13.93%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%15.25%
Revenue Next Year13.39%
Revenue Next 2Y11.96%
Revenue Next 3Y11.67%
Revenue Next 5YN/A
EBIT growth 1Y152.74%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year91.04%
EBIT Next 3Y39.61%
EBIT Next 5YN/A
FCF growth 1Y212.31%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y130.23%
OCF growth 3Y63.45%
OCF growth 5Y198.8%
Q2 HOLDINGS INC / QTWO FAQ
What is the fundamental rating for QTWO stock?
ChartMill assigns a fundamental rating of 5 / 10 to QTWO.
What is the valuation status for QTWO stock?
ChartMill assigns a valuation rating of 4 / 10 to Q2 HOLDINGS INC (QTWO). This can be considered as Fairly Valued.
Can you provide the profitability details for Q2 HOLDINGS INC?
Q2 HOLDINGS INC (QTWO) has a profitability rating of 4 / 10.
What is the valuation of Q2 HOLDINGS INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for Q2 HOLDINGS INC (QTWO) is 32.26 and the Price/Book (PB) ratio is 7.35.