Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - NYSE:QTWO - US74736L1098 - Common Stock
72.45 USD
+0.73 (+1.02%)
72.45 USD
0 (0%)
Overall QTWO gets a fundamental rating of 5 out of 10. We evaluated QTWO against 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 showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
QTWO had positive earnings in the past year.
In the past year QTWO had a positive cash flow from operations.
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
Looking at the Return On Assets, with a value of 2.22%, QTWO is in the better half of the industry, outperforming 65.12% of the companies in the same industry.
The Return On Equity of QTWO (5.09%) is better than 69.39% of its industry peers.
The Return On Invested Capital of QTWO (3.00%) is better than 69.39% of its industry peers.
| 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 65.48% of its industry peers.
Looking at the Operating Margin, with a value of 3.43%, QTWO is in the better half of the industry, outperforming 66.19% of the companies in the same industry.
The Gross Margin of QTWO (53.37%) is worse than 66.19% 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.
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 3.30. This indicates that QTWO is financially healthy and has little risk of bankruptcy at the moment.
QTWO's Altman-Z score of 3.30 is fine compared to the rest of the industry. QTWO outperforms 63.70% of its industry peers.
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 | 3.3 |
ROIC/WACC0.29
WACC10.47%
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.
With a Current ratio value of 0.97, QTWO is not doing good in the industry: 74.02% of the companies in the same industry are doing better.
A Quick Ratio of 0.97 indicates that QTWO may have some problems paying its short term obligations.
QTWO's Quick ratio of 0.97 is on the low side compared to the rest of the industry. QTWO is outperformed by 72.24% of its industry peers.
| 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
The Earnings Per Share is expected to grow by 19.47% on average over the next years. This is quite good.
QTWO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.67% yearly.
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
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
A Price/Earnings ratio of 31.92 indicates a quite expensive valuation of QTWO.
Based on the Price/Earnings ratio, QTWO is valued a bit cheaper than the industry average as 63.70% of the companies are valued more expensively.
QTWO is valuated rather expensively when we compare the Price/Earnings ratio to 25.89, which is the current average of the S&P500 Index.
QTWO is valuated quite expensively with a Price/Forward Earnings ratio of 28.78.
QTWO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 60.85% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (34.59), we can say QTWO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.92 | ||
| Fwd PE | 28.78 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, QTWO is valued a bit cheaper than the industry average as 62.99% of the companies are valued more expensively.
QTWO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 71.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.45 | ||
| EV/EBITDA | 51.71 |
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 19.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.81
PEG (5Y)0.96
EPS Next 2Y23.9%
EPS Next 3Y19.47%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
72.45
+0.73 (+1.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners106.25%
Inst Owner Change0.04%
Ins Owners0.5%
Ins Owner Change-1.93%
Market Cap4.52B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target103.52 (42.88%)
Short Float %5%
Short Ratio2.39
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)-1.39%
PT rev (3m)-1%
EPS NQ rev (1m)-0.3%
EPS NQ rev (3m)1.86%
EPS NY rev (1m)-0.15%
EPS NY rev (3m)2.51%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)0.14%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.92 | ||
| Fwd PE | 28.78 | ||
| P/S | 5.88 | ||
| P/FCF | 29.45 | ||
| P/OCF | 25.02 | ||
| P/B | 7.26 | ||
| P/tB | 163.32 | ||
| EV/EBITDA | 51.71 |
EPS(TTM)2.27
EY3.13%
EPS(NY)2.52
Fwd EY3.48%
FCF(TTM)2.46
FCFY3.4%
OCF(TTM)2.9
OCFY4%
SpS12.33
BVpS9.98
TBVpS0.44
PEG (NY)0.81
PEG (5Y)0.96
Graham Number22.57
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 | 3.3 |
F-Score7
WACC10.47%
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 31.92 and the Price/Book (PB) ratio is 7.26.