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Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis

NYSE:QTWO - New York Stock Exchange, Inc. - US74736L1098 - Common Stock - Currency: USD

75.9  -1.43 (-1.85%)

After market: 75.9 0 (0%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to QTWO. QTWO was compared to 281 industry peers in the Software industry. While QTWO seems to be doing ok healthwise, there are quite some concerns on its profitability. QTWO is valued quite expensively, but it does show have an excellent growth rating.


Dividend Valuation Growth Profitability Health

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2

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.
QTWO Yearly Net Income VS EBIT VS OCF VS FCFQTWO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M -50M 100M -100M

1.2 Ratios

Looking at the Return On Assets, with a value of -2.98%, QTWO is in line with its industry, outperforming 54.09% of the companies in the same industry.
Looking at the Return On Equity, with a value of -7.44%, QTWO is in line with its industry, outperforming 52.67% of the companies in the same industry.
Industry RankSector Rank
ROA -2.98%
ROE -7.44%
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
QTWO Yearly ROA, ROE, ROICQTWO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 -10 -20 -30

1.3 Margins

QTWO's Gross Margin of 50.90% is on the low side compared to the rest of the industry. QTWO is outperformed by 68.33% 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 RankSector Rank
OM N/A
PM (TTM) N/A
GM 50.9%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y4.1%
GM growth 5Y0.97%
QTWO Yearly Profit, Operating, Gross MarginsQTWO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40

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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
The number of shares outstanding for QTWO has been increased compared to 5 years ago.
Compared to 1 year ago, QTWO has an improved debt to assets ratio.
QTWO Yearly Shares OutstandingQTWO Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20M 40M 60M
QTWO Yearly Total Debt VS Total AssetsQTWO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B

2.2 Solvency

An Altman-Z score of 3.44 indicates that QTWO is not in any danger for bankruptcy at the moment.
QTWO has a Altman-Z score of 3.44. This is comparable to the rest of the industry: QTWO outperforms 59.07% of its industry peers.
The Debt to FCF ratio of QTWO is 4.61, which is a neutral value as it means it would take QTWO, 4.61 years of fcf income to pay off all of its debts.
QTWO has a Debt to FCF ratio of 4.61. This is comparable to the rest of the industry: QTWO outperforms 56.94% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that QTWO is somewhat dependend on debt financing.
QTWO has a worse Debt to Equity ratio (0.58) than 67.26% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.58
Debt/FCF 4.61
Altman-Z 3.44
ROIC/WACCN/A
WACC12.22%
QTWO Yearly LT Debt VS Equity VS FCFQTWO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M 400M 600M

2.3 Liquidity

A Current Ratio of 1.40 indicates that QTWO should not have too much problems paying its short term obligations.
QTWO's Current ratio of 1.40 is in line compared to the rest of the industry. QTWO outperforms 45.55% of its industry peers.
QTWO has a Quick Ratio of 1.40. This is a normal value and indicates that QTWO is financially healthy and should not expect problems in meeting its short term obligations.
QTWO has a Quick ratio of 1.40. This is comparable to the rest of the industry: QTWO outperforms 46.26% of its industry peers.
Industry RankSector Rank
Current Ratio 1.4
Quick Ratio 1.4
QTWO Yearly Current Assets VS Current LiabilitesQTWO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 106.29% 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.
QTWO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 11.50%.
Measured over the past years, QTWO shows a quite strong growth in Revenue. The Revenue has been growing by 17.16% on average per year.
EPS 1Y (TTM)106.29%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%160%
Revenue 1Y (TTM)11.5%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.91%

3.2 Future

The Earnings Per Share is expected to grow by 27.19% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.06% on average over the next years. This is quite good.
EPS Next Y29.03%
EPS Next 2Y26.51%
EPS Next 3Y27.19%
EPS Next 5YN/A
Revenue Next Year11.95%
Revenue Next 2Y11.3%
Revenue Next 3Y11.06%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
QTWO Yearly Revenue VS EstimatesQTWO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 200M 400M 600M 800M
QTWO Yearly EPS VS EstimatesQTWO Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 1 2 3

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3

4. Valuation

4.1 Price/Earnings Ratio

QTWO is valuated quite expensively with a Price/Earnings ratio of 46.28.
The rest of the industry has a similar Price/Earnings ratio as QTWO.
QTWO's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 29.35.
A Price/Forward Earnings ratio of 35.87 indicates a quite expensive valuation of QTWO.
Based on the Price/Forward Earnings ratio, QTWO is valued a bit cheaper than the industry average as 62.63% of the companies are valued more expensively.
QTWO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.10.
Industry RankSector Rank
PE 46.28
Fwd PE 35.87
QTWO Price Earnings VS Forward Price EarningsQTWO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

QTWO's Enterprise Value to EBITDA is on the same level as the industry average.
QTWO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 62.28% of the companies in the same industry.
Industry RankSector Rank
P/FCF 43.19
EV/EBITDA 133.64
QTWO Per share dataQTWO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8 10

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 27.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.59
PEG (5Y)1.39
EPS Next 2Y26.51%
EPS Next 3Y27.19%

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0

5. Dividend

5.1 Amount

No dividends for QTWO!.
Industry RankSector Rank
Dividend Yield N/A

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Q2 HOLDINGS INC

NYSE:QTWO (3/7/2025, 8:04:00 PM)

After market: 75.9 0 (0%)

75.9

-1.43 (-1.85%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-12 2025-02-12/amc
Earnings (Next)04-29 2025-04-29/amc
Inst Owners104.42%
Inst Owner Change1.99%
Ins Owners1.85%
Ins Owner Change-14.24%
Market Cap4.61B
Analysts79.05
Price Target111.33 (46.68%)
Short Float %5.64%
Short Ratio4.87
Dividend
Industry RankSector 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)16.85%
Min EPS beat(2)9.95%
Max EPS beat(2)23.75%
EPS beat(4)4
Avg EPS beat(4)15.47%
Min EPS beat(4)8.97%
Max EPS beat(4)23.75%
EPS beat(8)7
Avg EPS beat(8)31.26%
EPS beat(12)9
Avg EPS beat(12)29.47%
EPS beat(16)12
Avg EPS beat(16)28.82%
Revenue beat(2)0
Avg Revenue beat(2)-0.64%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)-0.26%
Revenue beat(4)0
Avg Revenue beat(4)-0.74%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)-0.26%
Revenue beat(8)0
Avg Revenue beat(8)-1.07%
Revenue beat(12)0
Avg Revenue beat(12)-1.53%
Revenue beat(16)0
Avg Revenue beat(16)-1.5%
PT rev (1m)5.16%
PT rev (3m)8.98%
EPS NQ rev (1m)5.84%
EPS NQ rev (3m)5.84%
EPS NY rev (1m)2.47%
EPS NY rev (3m)2.17%
Revenue NQ rev (1m)0.96%
Revenue NQ rev (3m)0.98%
Revenue NY rev (1m)0.53%
Revenue NY rev (3m)0.55%
Valuation
Industry RankSector Rank
PE 46.28
Fwd PE 35.87
P/S 6.62
P/FCF 43.19
P/OCF 33.95
P/B 8.9
P/tB N/A
EV/EBITDA 133.64
EPS(TTM)1.64
EY2.16%
EPS(NY)2.12
Fwd EY2.79%
FCF(TTM)1.76
FCFY2.32%
OCF(TTM)2.24
OCFY2.95%
SpS11.47
BVpS8.53
TBVpS-1.48
PEG (NY)1.59
PEG (5Y)1.39
Profitability
Industry RankSector Rank
ROA -2.98%
ROE -7.44%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 50.9%
FCFM 15.32%
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 Turnover0.54
Health
Industry RankSector Rank
Debt/Equity 0.58
Debt/FCF 4.61
Debt/EBITDA 8.84
Cap/Depr 42.19%
Cap/Sales 4.17%
Interest Coverage N/A
Cash Conversion 397.24%
Profit Quality N/A
Current Ratio 1.4
Quick Ratio 1.4
Altman-Z 3.44
F-Score6
WACC12.22%
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)106.29%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%160%
EPS Next Y29.03%
EPS Next 2Y26.51%
EPS Next 3Y27.19%
EPS Next 5YN/A
Revenue 1Y (TTM)11.5%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.91%
Revenue Next Year11.95%
Revenue Next 2Y11.3%
Revenue Next 3Y11.06%
Revenue Next 5YN/A
EBIT growth 1Y53.89%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year69.69%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y169.16%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y93.12%
OCF growth 3Y63.45%
OCF growth 5Y198.8%