Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
NYSE:QTWO - New York Stock Exchange, Inc. - US74736L1098 - Common Stock - Currency: USD
Taking everything into account, QTWO scores 4 out of 10 in our fundamental rating. QTWO was compared to 282 industry peers in the Software industry. The financial health of QTWO is average, but there are quite some concerns on its profitability. QTWO shows excellent growth, but is valued quite expensive already.
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 -1.48%, QTWO is in the better half of the industry, outperforming 60.64% of the companies in the same industry.
QTWO has a better Return On Equity (-3.66%) than 61.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.48% | ||
| ROE | -3.66% | ||
| ROIC | N/A |
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's Gross Margin of 51.79% is on the low side compared to the rest of the industry. QTWO is outperformed by 66.31% 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 | 51.79% |
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 does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for QTWO has been increased compared to 1 year ago.
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
An Altman-Z score of 4.28 indicates that QTWO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.28, QTWO is in the better half of the industry, outperforming 64.54% of the companies in the same industry.
QTWO has a debt to FCF ratio of 3.56. This is a good value and a sign of high solvency as QTWO would need 3.56 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.56, QTWO is in the better half of the industry, outperforming 62.06% of the companies in the same industry.
A Debt/Equity ratio of 0.55 indicates that QTWO is somewhat dependend on debt financing.
QTWO has a Debt to Equity ratio of 0.55. This is in the lower half of the industry: QTWO underperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3.56 | ||
| Altman-Z | 4.28 |
ROIC/WACCN/A
WACC10.44%
2.3 Liquidity
QTWO has a Current Ratio of 1.43. This is a normal value and indicates that QTWO is financially healthy and should not expect problems in meeting its short term obligations.
QTWO's Current ratio of 1.43 is in line compared to the rest of the industry. QTWO outperforms 46.10% of its industry peers.
A Quick Ratio of 1.43 indicates that QTWO should not have too much problems paying its short term obligations.
The Quick ratio of QTWO (1.43) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.43 |
3. Growth
3.1 Past
QTWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 107.73%, which is quite impressive.
The Earnings Per Share has been growing by 33.28% on average over the past years. This is a very strong growth
Looking at the last year, QTWO shows a quite strong growth in Revenue. The Revenue has grown by 13.12% in the last year.
The Revenue has been growing by 17.16% on average over the past years. This is quite good.
EPS 1Y (TTM)107.73%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%80%
Revenue 1Y (TTM)13.12%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%14.64%
3.2 Future
The Earnings Per Share is expected to grow by 21.60% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.32% on average over the next years. This is quite good.
EPS Next Y35.28%
EPS Next 2Y24.55%
EPS Next 3Y21.6%
EPS Next 5YN/A
Revenue Next Year12.59%
Revenue Next 2Y11.56%
Revenue Next 3Y11.32%
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.
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
With a Price/Earnings ratio of 47.44, QTWO can be considered very expensive at the moment.
61.35% of the companies in the same industry are more expensive than QTWO, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, QTWO is valued quite expensively.
Based on the Price/Forward Earnings ratio of 35.06, the valuation of QTWO can be described as expensive.
QTWO's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (21.76), we can say QTWO is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.44 | ||
| Fwd PE | 35.06 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as QTWO.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of QTWO indicates a somewhat cheap valuation: QTWO is cheaper than 65.96% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.11 | ||
| EV/EBITDA | 119.12 |
4.3 Compensation for Growth
QTWO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
QTWO's earnings are expected to grow with 21.60% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.34
PEG (5Y)1.43
EPS Next 2Y24.55%
EPS Next 3Y21.6%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
89.19
-3.4 (-3.67%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners106.12%
Inst Owner Change0%
Ins Owners0.53%
Ins Owner Change-7.84%
Market Cap5.56B
Analysts77.39
Price Target100.98 (13.22%)
Short Float %5.23%
Short Ratio5.7
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)11.46%
Min EPS beat(2)9.95%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)16.47%
Min EPS beat(4)9.95%
Max EPS beat(4)23.75%
EPS beat(8)7
Avg EPS beat(8)13.66%
EPS beat(12)10
Avg EPS beat(12)34.76%
EPS beat(16)12
Avg EPS beat(16)27.94%
Revenue beat(2)0
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-0.35%
Max Revenue beat(2)-0.26%
Revenue beat(4)0
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)-0.26%
Revenue beat(8)0
Avg Revenue beat(8)-1.1%
Revenue beat(12)0
Avg Revenue beat(12)-1.5%
Revenue beat(16)0
Avg Revenue beat(16)-1.47%
PT rev (1m)-0.27%
PT rev (3m)-8.15%
EPS NQ rev (1m)0.46%
EPS NQ rev (3m)3.36%
EPS NY rev (1m)-0.22%
EPS NY rev (3m)4.84%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.95%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.44 | ||
| Fwd PE | 35.06 | ||
| P/S | 7.71 | ||
| P/FCF | 40.11 | ||
| P/OCF | 33.5 | ||
| P/B | 10.19 | ||
| P/tB | N/A | ||
| EV/EBITDA | 119.12 |
EPS(TTM)1.88
EY2.11%
EPS(NY)2.54
Fwd EY2.85%
FCF(TTM)2.22
FCFY2.49%
OCF(TTM)2.66
OCFY2.98%
SpS11.57
BVpS8.76
TBVpS-0.93
PEG (NY)1.34
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.48% | ||
| ROE | -3.66% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 51.79% | ||
| FCFM | 19.22% |
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
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 3Y4.1%
GM growth 5Y0.97%
F-Score6
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3.56 | ||
| Debt/EBITDA | 6.35 | ||
| Cap/Depr | 42.02% | ||
| Cap/Sales | 3.79% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | 348.23% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.43 | ||
| Quick Ratio | 1.43 | ||
| Altman-Z | 4.28 |
F-Score6
WACC10.44%
ROIC/WACCN/A
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)107.73%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%80%
EPS Next Y35.28%
EPS Next 2Y24.55%
EPS Next 3Y21.6%
EPS Next 5YN/A
Revenue 1Y (TTM)13.12%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%14.64%
Revenue Next Year12.59%
Revenue Next 2Y11.56%
Revenue Next 3Y11.32%
Revenue Next 5YN/A
EBIT growth 1Y74.8%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year84.25%
EBIT Next 3Y38.03%
EBIT Next 5YN/A
FCF growth 1Y766.9%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y268.96%
OCF growth 3Y63.45%
OCF growth 5Y198.8%