Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - NYSE:QTWO - US74736L1098 - Common Stock
82.18 USD
-0.54 (-0.65%)
82.18 USD
0 (0%)
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 valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
In the past year QTWO was profitable.
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
QTWO's Return On Assets of 0.35% is fine compared to the rest of the industry. QTWO outperforms 61.43% of its industry peers.
With a decent Return On Equity value of 0.84%, QTWO is doing good in the industry, outperforming 63.57% of the companies in the same industry.
The Return On Invested Capital of QTWO (0.60%) is better than 61.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.84% | ||
| ROIC | 0.6% |
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 (0.66%) than 62.14% of its industry peers.
QTWO's Operating Margin of 0.66% is fine compared to the rest of the industry. QTWO outperforms 60.71% of its industry peers.
The Gross Margin of QTWO (52.62%) is worse than 67.14% 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 | 0.66% | ||
| PM (TTM) | 0.66% | ||
| GM | 52.62% |
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
Compared to 5 years ago, QTWO has more shares outstanding
Compared to 1 year ago, QTWO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.67 indicates that QTWO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.67, QTWO is doing good in the industry, outperforming 62.86% 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 | 3.26 | ||
| Altman-Z | 3.67 |
ROIC/WACC0.06
WACC10.77%
2.3 Liquidity
A Current Ratio of 0.90 indicates that QTWO may have some problems paying its short term obligations.
QTWO has a Current ratio of 0.90. This is in the lower half of the industry: QTWO underperforms 76.43% of its industry peers.
QTWO has a Quick Ratio of 0.90. 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 has a worse Quick ratio (0.90) than 75.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 89.04% 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 13.34%.
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)89.04%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%50%
Revenue 1Y (TTM)13.34%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.87%
3.2 Future
The Earnings Per Share is expected to grow by 23.88% 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 11.81% yearly.
EPS Next Y39.52%
EPS Next 2Y24.05%
EPS Next 3Y23.88%
EPS Next 5YN/A
Revenue Next Year13.43%
Revenue Next 2Y12.04%
Revenue Next 3Y11.81%
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
QTWO is valuated quite expensively with a Price/Earnings ratio of 39.70.
QTWO's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.30. QTWO is valued slightly more expensive when compared to this.
Based on the Price/Forward Earnings ratio of 32.56, the valuation of QTWO can be described as expensive.
QTWO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 60.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (22.73), we can say QTWO is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.7 | ||
| Fwd PE | 32.56 |
4.2 Price Multiples
QTWO's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, QTWO is valued a bit cheaper than the industry average as 69.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.88 | ||
| EV/EBITDA | 75.55 |
4.3 Compensation for Growth
QTWO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as QTWO's earnings are expected to grow with 23.88% in the coming years.
PEG (NY)1
PEG (5Y)1.19
EPS Next 2Y24.05%
EPS Next 3Y23.88%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
82.18
-0.54 (-0.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners105.48%
Inst Owner Change-1.99%
Ins Owners0.52%
Ins Owner Change-7.53%
Market Cap5.13B
Analysts79.09
Price Target104.98 (27.74%)
Short Float %4.34%
Short Ratio3.46
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)10.13%
Min EPS beat(2)7.29%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)13.49%
Min EPS beat(4)7.29%
Max EPS beat(4)23.75%
EPS beat(8)7
Avg EPS beat(8)9.14%
EPS beat(12)10
Avg EPS beat(12)32.79%
EPS beat(16)12
Avg EPS beat(16)27.48%
Revenue beat(2)0
Avg Revenue beat(2)-0.79%
Min Revenue beat(2)-1.24%
Max Revenue beat(2)-0.35%
Revenue beat(4)0
Avg Revenue beat(4)-0.72%
Min Revenue beat(4)-1.24%
Max Revenue beat(4)-0.26%
Revenue beat(8)0
Avg Revenue beat(8)-1.04%
Revenue beat(12)0
Avg Revenue beat(12)-1.44%
Revenue beat(16)0
Avg Revenue beat(16)-1.46%
PT rev (1m)0.4%
PT rev (3m)4.66%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)3.62%
EPS NY rev (1m)2.67%
EPS NY rev (3m)2.91%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)1.7%
Revenue NY rev (1m)0.67%
Revenue NY rev (3m)0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 39.7 | ||
| Fwd PE | 32.56 | ||
| P/S | 6.91 | ||
| P/FCF | 33.88 | ||
| P/OCF | 28.75 | ||
| P/B | 8.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 75.55 |
EPS(TTM)2.07
EY2.52%
EPS(NY)2.52
Fwd EY3.07%
FCF(TTM)2.43
FCFY2.95%
OCF(TTM)2.86
OCFY3.48%
SpS11.9
BVpS9.36
TBVpS-0.25
PEG (NY)1
PEG (5Y)1.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.84% | ||
| ROCE | 0.76% | ||
| ROIC | 0.6% | ||
| ROICexc | 3.22% | ||
| ROICexgc | N/A | ||
| OM | 0.66% | ||
| PM (TTM) | 0.66% | ||
| GM | 52.62% | ||
| FCFM | 20.39% |
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-Score7
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 3.26 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 44.3% | ||
| Cap/Sales | 3.63% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 271.01% | ||
| Profit Quality | 3101.41% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.9 | ||
| Altman-Z | 3.67 |
F-Score7
WACC10.77%
ROIC/WACC0.06
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)89.04%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%50%
EPS Next Y39.52%
EPS Next 2Y24.05%
EPS Next 3Y23.88%
EPS Next 5YN/A
Revenue 1Y (TTM)13.34%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%12.87%
Revenue Next Year13.43%
Revenue Next 2Y12.04%
Revenue Next 3Y11.81%
Revenue Next 5YN/A
EBIT growth 1Y108.18%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year90.15%
EBIT Next 3Y39.61%
EBIT Next 5YN/A
FCF growth 1Y327.29%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y165.01%
OCF growth 3Y63.45%
OCF growth 5Y198.8%