Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:QTWO - US74736L1098 - Common Stock
73.52 USD
+0.87 (+1.2%)
73.52 USD
0 (0%)
QTWO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 282 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 not priced too expensively while it is growing strongly. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
QTWO had positive earnings in the past year.
QTWO had a positive operating cash flow in the past year.
In the past 5 years QTWO always reported negative net income.
Of the past 5 years QTWO 4 years had a positive operating cash flow.
1.2 Ratios
QTWO's Return On Assets of 2.22% is fine compared to the rest of the industry. QTWO outperforms 64.18% of its industry peers.
QTWO has a better Return On Equity (5.09%) than 69.50% of its industry peers.
With a decent Return On Invested Capital value of 3.00%, QTWO is doing good in the industry, outperforming 69.15% 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
QTWO has a better Profit Margin (4.12%) than 63.83% of its industry peers.
The Operating Margin of QTWO (3.43%) is better than 65.96% of its industry peers.
QTWO has a worse Gross Margin (53.37%) than 67.02% of its industry peers.
In the last couple of years the Gross Margin of QTWO has remained more or less at the same level.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so QTWO is destroying value.
Compared to 1 year ago, QTWO has more shares outstanding
The number of shares outstanding for QTWO has been increased compared to 5 years ago.
Compared to 1 year ago, QTWO has an improved debt to assets ratio.
2.2 Solvency
QTWO has an Altman-Z score of 3.39. This indicates that QTWO is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.39, QTWO is doing good in the industry, outperforming 62.41% 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 | 3.22 | ||
| Altman-Z | 3.39 |
ROIC/WACC0.29
WACC10.41%
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 75.53% of its industry peers.
QTWO has a Quick 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.
With a Quick ratio value of 0.97, QTWO is not doing good in the industry: 74.11% 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
QTWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 71.97%, which is quite impressive.
QTWO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.28% yearly.
QTWO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.93%.
QTWO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.16% yearly.
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
The Earnings Per Share is expected to grow by 25.97% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.71% on average over the next years. This is quite good.
EPS Next Y46.92%
EPS Next 2Y31.49%
EPS Next 3Y25.97%
EPS Next 5YN/A
Revenue Next Year14.15%
Revenue Next 2Y12.19%
Revenue Next 3Y11.71%
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
The Price/Earnings ratio is 32.39, which means the current valuation is very expensive for QTWO.
61.35% of the companies in the same industry are more expensive than QTWO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.46. QTWO is valued slightly more expensive when compared to this.
QTWO is valuated quite expensively with a Price/Forward Earnings ratio of 25.93.
65.25% of the companies in the same industry are more expensive than QTWO, based on the Price/Forward Earnings ratio.
QTWO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.39 | ||
| Fwd PE | 25.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, QTWO is valued a bit cheaper than 60.99% of the companies in the same industry.
70.92% 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 | 29.93 | ||
| EV/EBITDA | 53.14 |
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.
QTWO's earnings are expected to grow with 25.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.69
PEG (5Y)0.97
EPS Next 2Y31.49%
EPS Next 3Y25.97%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
73.52
+0.87 (+1.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners110.4%
Inst Owner Change5.88%
Ins Owners0.49%
Ins Owner Change-1.91%
Market Cap4.60B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target90.7 (23.37%)
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)-12.39%
PT rev (3m)-13.6%
EPS NQ rev (1m)3.51%
EPS NQ rev (3m)5.8%
EPS NY rev (1m)5.46%
EPS NY rev (3m)5.3%
Revenue NQ rev (1m)0.21%
Revenue NQ rev (3m)0.6%
Revenue NY rev (1m)0.67%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.39 | ||
| Fwd PE | 25.93 | ||
| P/S | 5.97 | ||
| P/FCF | 29.93 | ||
| P/OCF | 25.43 | ||
| P/B | 7.38 | ||
| P/tB | 165.97 | ||
| EV/EBITDA | 53.14 |
EPS(TTM)2.27
EY3.09%
EPS(NY)2.84
Fwd EY3.86%
FCF(TTM)2.46
FCFY3.34%
OCF(TTM)2.89
OCFY3.93%
SpS12.31
BVpS9.96
TBVpS0.44
PEG (NY)0.69
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 | 3.39 |
F-Score7
WACC10.41%
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 Y46.92%
EPS Next 2Y31.49%
EPS Next 3Y25.97%
EPS Next 5YN/A
Revenue 1Y (TTM)13.93%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%15.25%
Revenue Next Year14.15%
Revenue Next 2Y12.19%
Revenue Next 3Y11.71%
Revenue Next 5YN/A
EBIT growth 1Y152.74%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year95.45%
EBIT Next 3Y42.01%
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 32.39 and the Price/Book (PB) ratio is 7.38.