Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
NYSE:QTWO - New York Stock Exchange, Inc. - US74736L1098 - Common Stock - Currency: USD
Overall QTWO gets a fundamental rating of 5 out of 10. We evaluated QTWO against 284 industry peers in the Software industry. The financial health of QTWO is average, but there are quite some concerns on its profitability. QTWO is not overvalued while it is showing excellent growth. This is an interesting 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
The Return On Assets of QTWO (-4.46%) is comparable to the rest of the industry.
The Return On Equity of QTWO (-11.47%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.46% | ||
| ROE | -11.47% | ||
| ROIC | N/A |
ROA(3y)-7.22%
ROA(5y)-7.68%
ROE(3y)-20.12%
ROE(5y)-20.09%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Gross Margin of QTWO (50.26%) is worse than 70.04% of its industry peers.
In the last couple of years the Gross Margin of QTWO has remained more or less at the same level.
The Profit Margin and Operating Margin are not available for QTWO so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 50.26% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.78%
GM growth 5Y-0.4%
2. Health
2.1 Basic Checks
QTWO does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, QTWO has more shares outstanding
Compared to 5 years ago, QTWO has more shares outstanding
QTWO has a better debt/assets ratio than last year.
2.2 Solvency
QTWO has an Altman-Z score of 4.37. This indicates that QTWO is financially healthy and has little risk of bankruptcy at the moment.
QTWO has a Altman-Z score (4.37) which is comparable to the rest of the industry.
The Debt to FCF ratio of QTWO is 4.93, which is a neutral value as it means it would take QTWO, 4.93 years of fcf income to pay off all of its debts.
QTWO's Debt to FCF ratio of 4.93 is in line compared to the rest of the industry. QTWO outperforms 57.40% of its industry peers.
A Debt/Equity ratio of 0.99 indicates that QTWO is somewhat dependend on debt financing.
The Debt to Equity ratio of QTWO (0.99) is worse than 76.53% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 4.93 | ||
| Altman-Z | 4.37 |
ROIC/WACCN/A
WACC10.44%
2.3 Liquidity
A Current Ratio of 2.50 indicates that QTWO has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.50, QTWO is in the better half of the industry, outperforming 69.31% of the companies in the same industry.
QTWO has a Quick Ratio of 2.50. This indicates that QTWO is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of QTWO (2.50) is better than 69.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.5 | ||
| Quick Ratio | 2.5 |
3. Growth
3.1 Past
QTWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 101.53%, which is quite impressive.
Measured over the past years, QTWO shows a very strong growth in Earnings Per Share. The EPS has been growing by 29.30% on average per year.
The Revenue has grown by 10.93% in the past year. This is quite good.
Measured over the past years, QTWO shows a very strong growth in Revenue. The Revenue has been growing by 20.97% on average per year.
EPS 1Y (TTM)101.53%
EPS 3Y124.78%
EPS 5Y29.3%
EPS Q2Q%104.65%
Revenue 1Y (TTM)10.93%
Revenue growth 3Y15.75%
Revenue growth 5Y20.97%
Sales Q2Q%12.89%
3.2 Future
The Earnings Per Share is expected to grow by 49.26% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.45% on average over the next years. This is quite good.
EPS Next Y104%
EPS Next 2Y61.17%
EPS Next 3Y49.26%
EPS Next 5YN/A
Revenue Next Year11.09%
Revenue Next 2Y11.22%
Revenue Next 3Y11.45%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 71.99, which means the current valuation is very expensive for QTWO.
QTWO's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.47, QTWO is valued quite expensively.
The Price/Forward Earnings ratio is 46.02, which means the current valuation is very expensive for QTWO.
QTWO's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 92.74, QTWO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 71.99 | ||
| Fwd PE | 46.02 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QTWO is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, QTWO is valued a bit cheaper than the industry average as 61.01% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57.57 | ||
| EV/EBITDA | 276.02 |
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 49.26% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.69
PEG (5Y)2.46
EPS Next 2Y61.17%
EPS Next 3Y49.26%
5. Dividend
5.1 Amount
QTWO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Q2 HOLDINGS INC
NYSE:QTWO (2/4/2025, 8:04:00 PM)
After market: 95.03 0 (0%)95.03
+0.46 (+0.49%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners106.49%
Inst Owner Change-0.99%
Ins Owners1.93%
Ins Owner Change-3.58%
Market Cap5.74B
Analysts80
Price Target105.86 (11.4%)
Short Float %5.07%
Short Ratio4.58
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)21.47%
Min EPS beat(2)19.2%
Max EPS beat(2)23.75%
EPS beat(4)3
Avg EPS beat(4)7.65%
Min EPS beat(4)-21.31%
Max EPS beat(4)23.75%
EPS beat(8)6
Avg EPS beat(8)23.79%
EPS beat(12)9
Avg EPS beat(12)35.43%
EPS beat(16)11
Avg EPS beat(16)24.18%
Revenue beat(2)0
Avg Revenue beat(2)-0.93%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)-0.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.07%
Min Revenue beat(4)-1.57%
Max Revenue beat(4)-0.83%
Revenue beat(8)0
Avg Revenue beat(8)-1.52%
Revenue beat(12)0
Avg Revenue beat(12)-1.68%
Revenue beat(16)1
Avg Revenue beat(16)-1.45%
PT rev (1m)0.69%
PT rev (3m)27.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)15.52%
EPS NY rev (1m)0%
EPS NY rev (3m)7.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.63%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 71.99 | ||
| Fwd PE | 46.02 | ||
| P/S | 8.5 | ||
| P/FCF | 57.57 | ||
| P/OCF | 44.4 | ||
| P/B | 11.59 | ||
| P/tB | N/A | ||
| EV/EBITDA | 276.02 |
EPS(TTM)1.32
EY1.39%
EPS(NY)2.07
Fwd EY2.17%
FCF(TTM)1.65
FCFY1.74%
OCF(TTM)2.14
OCFY2.25%
SpS11.18
BVpS8.2
TBVpS-1.97
PEG (NY)0.69
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.46% | ||
| ROE | -11.47% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 50.26% | ||
| FCFM | 14.76% |
ROA(3y)-7.22%
ROA(5y)-7.68%
ROE(3y)-20.12%
ROE(5y)-20.09%
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 3Y3.78%
GM growth 5Y-0.4%
F-Score7
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.99 | ||
| Debt/FCF | 4.93 | ||
| Debt/EBITDA | 23.79 | ||
| Cap/Depr | 41.82% | ||
| Cap/Sales | 4.38% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | 625.12% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.5 | ||
| Quick Ratio | 2.5 | ||
| Altman-Z | 4.37 |
F-Score7
WACC10.44%
ROIC/WACCN/A
Cap/Depr(3y)46.07%
Cap/Depr(5y)47.23%
Cap/Sales(3y)5.12%
Cap/Sales(5y)5.2%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)101.53%
EPS 3Y124.78%
EPS 5Y29.3%
EPS Q2Q%104.65%
EPS Next Y104%
EPS Next 2Y61.17%
EPS Next 3Y49.26%
EPS Next 5YN/A
Revenue 1Y (TTM)10.93%
Revenue growth 3Y15.75%
Revenue growth 5Y20.97%
Sales Q2Q%12.89%
Revenue Next Year11.09%
Revenue Next 2Y11.22%
Revenue Next 3Y11.45%
Revenue Next 5YN/A
EBIT growth 1Y41.42%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year153.31%
EBIT Next 3Y61.8%
EBIT Next 5YN/A
FCF growth 1Y10072.8%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y313.99%
OCF growth 3YN/A
OCF growth 5Y72.52%