Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:QTWO - US74736L1098 - Common Stock
74.79 USD
+0.25 (+0.34%)
We assign a fundamental rating of 5 out of 10 to QTWO. QTWO was compared to 280 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 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.
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
The Return On Assets of QTWO (2.22%) is better than 63.93% of its industry peers.
QTWO's Return On Equity of 5.09% is fine compared to the rest of the industry. QTWO outperforms 69.29% of its industry peers.
QTWO has a better Return On Invested Capital (3.00%) than 69.29% 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
The Profit Margin of QTWO (4.12%) is better than 63.93% of its industry peers.
QTWO's Operating Margin of 3.43% is fine compared to the rest of the industry. QTWO outperforms 66.43% of its industry peers.
The Gross Margin of QTWO (53.37%) is worse than 66.79% 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
QTWO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
QTWO has more shares outstanding than it did 1 year ago.
QTWO has more shares outstanding than it did 5 years ago.
QTWO has a better debt/assets ratio than last year.
2.2 Solvency
QTWO has an Altman-Z score of 3.44. This indicates that QTWO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of QTWO (3.44) is better than 61.43% of its industry peers.
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 | 3.44 |
ROIC/WACC0.29
WACC10.48%
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's Current ratio of 0.97 is on the low side compared to the rest of the industry. QTWO is outperformed by 75.71% 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: 74.29% 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
The Earnings Per Share has grown by an impressive 71.97% over the past year.
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.
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
QTWO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.71% yearly.
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
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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 32.95 indicates a quite expensive valuation of QTWO.
Based on the Price/Earnings ratio, QTWO is valued a bit cheaper than the industry average as 61.79% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of QTWO to the average of the S&P500 Index (26.59), we can say QTWO is valued slightly more expensively.
A Price/Forward Earnings ratio of 26.38 indicates a quite expensive valuation of QTWO.
QTWO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. QTWO is 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 (23.80), we can say QTWO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.95 | ||
| Fwd PE | 26.38 |
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.
71.07% 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 | 30.44 | ||
| EV/EBITDA | 53.91 |
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.
QTWO's earnings are expected to grow with 25.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.7
PEG (5Y)0.99
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 |
NYSE:QTWO (12/11/2025, 11:21:24 AM)
74.79
+0.25 (+0.34%)
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 Cap4.68B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target90.7 (21.27%)
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 | 32.95 | ||
| Fwd PE | 26.38 | ||
| P/S | 6.08 | ||
| P/FCF | 30.44 | ||
| P/OCF | 25.87 | ||
| P/B | 7.51 | ||
| P/tB | 168.84 | ||
| EV/EBITDA | 53.91 |
EPS(TTM)2.27
EY3.04%
EPS(NY)2.84
Fwd EY3.79%
FCF(TTM)2.46
FCFY3.28%
OCF(TTM)2.89
OCFY3.87%
SpS12.31
BVpS9.96
TBVpS0.44
PEG (NY)0.7
PEG (5Y)0.99
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 | 3.44 |
F-Score7
WACC10.48%
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 32.95 and the Price/Book (PB) ratio is 7.51.