Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:QTWO - US74736L1098 - Common Stock
73.9 USD
+0.4 (+0.54%)
73.9 USD
0 (0%)
Overall QTWO gets a fundamental rating of 5 out of 10. We evaluated QTWO against 280 industry peers in the Software industry. QTWO has only an average score on both its financial health and profitability. QTWO is not overvalued while it is showing excellent growth. This is an interesting combination.
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.
QTWO had negative earnings in each of the past 5 years.
QTWO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of QTWO (2.22%) is better than 63.93% of its industry peers.
Looking at the Return On Equity, with a value of 5.09%, QTWO is in the better half of the industry, outperforming 69.29% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 3.00%, QTWO is in the better half of the industry, outperforming 69.29% 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
The Profit Margin of QTWO (4.12%) is better than 63.93% of its industry peers.
The Operating Margin of QTWO (3.43%) is better than 66.43% of its industry peers.
With a Gross Margin value of 53.37%, QTWO is not doing good in the industry: 66.79% 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 | 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
QTWO has more shares outstanding than it did 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 3.41. This indicates that QTWO is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.41, QTWO is in the better half of the industry, outperforming 62.50% 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 | 3.41 |
ROIC/WACC0.29
WACC10.45%
2.3 Liquidity
A Current Ratio of 0.97 indicates that QTWO may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.97, QTWO is doing worse than 75.71% of the companies in the same industry.
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 74.29% of its industry peers.
| 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.
The Revenue has grown by 13.93% in the past year. This is quite good.
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
QTWO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.97% yearly.
Based on estimates for the next years, QTWO will show a quite strong growth in Revenue. The Revenue will grow by 11.71% on average per year.
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
A Price/Earnings ratio of 32.56 indicates a quite expensive valuation of QTWO.
Compared to the rest of the industry, the Price/Earnings ratio of QTWO indicates a somewhat cheap valuation: QTWO is cheaper than 61.79% of the companies listed in the same industry.
QTWO is valuated rather expensively when we compare the Price/Earnings ratio to 26.29, which is the current average of the S&P500 Index.
QTWO is valuated quite expensively with a Price/Forward Earnings ratio of 26.06.
Based on the Price/Forward Earnings ratio, QTWO is valued a bit cheaper than 65.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (23.51), we can say QTWO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.56 | ||
| Fwd PE | 26.06 |
4.2 Price Multiples
61.43% of the companies in the same industry are more expensive than QTWO, based on the Enterprise Value to EBITDA ratio.
71.43% 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 | 30.08 | ||
| EV/EBITDA | 53.43 |
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 25.97% in the coming years.
PEG (NY)0.69
PEG (5Y)0.98
EPS Next 2Y31.49%
EPS Next 3Y25.97%
5. Dividend
5.1 Amount
QTWO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
73.9
+0.4 (+0.54%)
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-2.15%
Market Cap4.62B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target90.7 (22.73%)
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 | 32.56 | ||
| Fwd PE | 26.06 | ||
| P/S | 6 | ||
| P/FCF | 30.08 | ||
| P/OCF | 25.56 | ||
| P/B | 7.42 | ||
| P/tB | 166.83 | ||
| EV/EBITDA | 53.43 |
EPS(TTM)2.27
EY3.07%
EPS(NY)2.84
Fwd EY3.84%
FCF(TTM)2.46
FCFY3.32%
OCF(TTM)2.89
OCFY3.91%
SpS12.31
BVpS9.96
TBVpS0.44
PEG (NY)0.69
PEG (5Y)0.98
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 | 3.41 |
F-Score7
WACC10.45%
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 5 / 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 32.56 and the Price/Book (PB) ratio is 7.42.