Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - NYSE:QTWO - US74736L1098 - Common Stock
61.58 USD
-0.66 (-1.06%)
61.58 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to QTWO. QTWO was compared to 282 industry peers in the Software industry. QTWO has an average financial health and profitability rating. QTWO is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
In the past year QTWO was profitable.
In the past year QTWO had a positive cash flow from operations.
QTWO had negative earnings in each of the past 5 years.
Of the past 5 years QTWO 4 years had a positive operating cash flow.
1.2 Ratios
QTWO has a better Return On Assets (0.35%) than 60.99% of its industry peers.
With a decent Return On Equity value of 0.84%, QTWO is doing good in the industry, outperforming 63.12% of the companies in the same industry.
QTWO has a better Return On Invested Capital (0.60%) than 60.99% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.84% | ||
| ROIC | 0.6% |
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
The Profit Margin of QTWO (0.66%) is better than 61.70% of its industry peers.
QTWO's Operating Margin of 0.66% is fine compared to the rest of the industry. QTWO outperforms 60.28% of its industry peers.
With a Gross Margin value of 52.62%, QTWO is not doing good in the industry: 66.31% of the companies in the same industry are doing better.
QTWO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.66% | ||
| PM (TTM) | 0.66% | ||
| GM | 52.62% |
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
QTWO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for QTWO has been increased compared to 1 year ago.
Compared to 5 years ago, QTWO has more shares outstanding
The debt/assets ratio for QTWO has been reduced compared to a year ago.
2.2 Solvency
QTWO has an Altman-Z score of 2.71. This is not the best score and indicates that QTWO is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.71, QTWO perfoms like the industry average, outperforming 54.96% of the companies in the same industry.
QTWO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 3.26 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.06
WACC10.64%
2.3 Liquidity
A Current Ratio of 0.90 indicates that QTWO may have some problems paying its short term obligations.
QTWO has a worse Current ratio (0.90) than 76.24% of its industry peers.
QTWO has a Quick Ratio of 0.90. 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 Quick ratio of 0.90. This is in the lower half of the industry: QTWO underperforms 75.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
QTWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 89.04%, which is quite impressive.
The Earnings Per Share has been growing by 33.28% on average over the past years. This is a very strong growth
The Revenue has grown by 13.34% in the past year. This is quite good.
Measured over the past years, QTWO shows a quite strong growth in Revenue. The Revenue has been growing by 17.16% on average per year.
EPS 1Y (TTM)89.04%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%50%
Revenue 1Y (TTM)13.34%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.87%
3.2 Future
QTWO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.78% yearly.
The Revenue is expected to grow by 11.68% on average over the next years. This is quite good.
EPS Next Y39.52%
EPS Next 2Y24.05%
EPS Next 3Y19.78%
EPS Next 5YN/A
Revenue Next Year13.41%
Revenue Next 2Y11.98%
Revenue Next 3Y11.68%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 29.75, QTWO can be considered very expensive at the moment.
Based on the Price/Earnings ratio, QTWO is valued a bit cheaper than the industry average as 65.96% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of QTWO to the average of the S&P500 Index (27.34), we can say QTWO is valued inline with the index average.
QTWO is valuated rather expensively with a Price/Forward Earnings ratio of 24.40.
Based on the Price/Forward Earnings ratio, QTWO is valued a bit cheaper than 68.79% of the companies in the same industry.
QTWO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.86.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.75 | ||
| Fwd PE | 24.4 |
4.2 Price Multiples
61.70% of the companies in the same industry are more expensive than QTWO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of QTWO indicates a somewhat cheap valuation: QTWO is cheaper than 75.53% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.38 | ||
| EV/EBITDA | 56.02 |
4.3 Compensation for Growth
The 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 19.78% in the coming years.
PEG (NY)0.75
PEG (5Y)0.89
EPS Next 2Y24.05%
EPS Next 3Y19.78%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
61.58
-0.66 (-1.06%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners106.25%
Inst Owner Change-0.86%
Ins Owners0.5%
Ins Owner Change-1.93%
Market Cap3.85B
Analysts79.09
Price Target104.98 (70.48%)
Short Float %4.6%
Short Ratio2.23
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)10.13%
Min EPS beat(2)7.29%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)13.49%
Min EPS beat(4)7.29%
Max EPS beat(4)23.75%
EPS beat(8)7
Avg EPS beat(8)9.14%
EPS beat(12)10
Avg EPS beat(12)32.79%
EPS beat(16)12
Avg EPS beat(16)27.48%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.35%
Revenue beat(4)0
Avg Revenue beat(4)-0.72%
Min Revenue beat(4)-1.24%
Max Revenue beat(4)-0.26%
Revenue beat(8)0
Avg Revenue beat(8)-1.04%
Revenue beat(12)0
Avg Revenue beat(12)-1.44%
Revenue beat(16)0
Avg Revenue beat(16)-1.46%
PT rev (1m)0%
PT rev (3m)3.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.85%
EPS NY rev (1m)0%
EPS NY rev (3m)2.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.65%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.75 | ||
| Fwd PE | 24.4 | ||
| P/S | 5.18 | ||
| P/FCF | 25.38 | ||
| P/OCF | 21.55 | ||
| P/B | 6.58 | ||
| P/tB | N/A | ||
| EV/EBITDA | 56.02 |
EPS(TTM)2.07
EY3.36%
EPS(NY)2.52
Fwd EY4.1%
FCF(TTM)2.43
FCFY3.94%
OCF(TTM)2.86
OCFY4.64%
SpS11.9
BVpS9.36
TBVpS-0.25
PEG (NY)0.75
PEG (5Y)0.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.84% | ||
| ROCE | 0.76% | ||
| ROIC | 0.6% | ||
| ROICexc | 3.22% | ||
| ROICexgc | N/A | ||
| OM | 0.66% | ||
| PM (TTM) | 0.66% | ||
| GM | 52.62% | ||
| FCFM | 20.39% |
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
ROICexcg growth 3YN/A
ROICexcg 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 | 3.26 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 44.3% | ||
| Cap/Sales | 3.63% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 271.01% | ||
| Profit Quality | 3101.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 2.71 |
F-Score7
WACC10.64%
ROIC/WACC0.06
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)89.04%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%50%
EPS Next Y39.52%
EPS Next 2Y24.05%
EPS Next 3Y19.78%
EPS Next 5YN/A
Revenue 1Y (TTM)13.34%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.87%
Revenue Next Year13.41%
Revenue Next 2Y11.98%
Revenue Next 3Y11.68%
Revenue Next 5YN/A
EBIT growth 1Y108.18%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year91.04%
EBIT Next 3Y39.61%
EBIT Next 5YN/A
FCF growth 1Y327.29%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y165.01%
OCF growth 3Y63.45%
OCF growth 5Y198.8%