Q2 HOLDINGS INC (QTWO)
US74736L1098 - Common Stock
Taking everything into account, QTWO scores 4 out of 10 in our fundamental rating. QTWO was compared to 277 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.
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.
1.2 Ratios
Looking at the Return On Assets, with a value of -6.69%, QTWO is in line with its industry, outperforming 49.82% of the companies in the same industry.
Looking at the Return On Equity, with a value of -17.66%, QTWO is in line with its industry, outperforming 48.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.69% | ||
| ROE | -17.66% | ||
| ROIC | N/A |
ROA(3y)-7.22%
ROA(5y)-7.68%
ROE(3y)-20.12%
ROE(5y)-20.09%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
QTWO has a Gross Margin of 48.90%. This is in the lower half of the industry: QTWO underperforms 68.73% 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 | 48.9% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y3.78%
GM growth 5Y-0.4%
2. Health
2.1 Basic Checks
QTWO does not have a ROIC to compare to the WACC, probably because it is not profitable.
QTWO has more shares outstanding than it did 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 2.75 indicates that QTWO is not a great score, but indicates only limited risk for bankruptcy at the moment.
QTWO has a Altman-Z score of 2.75. This is comparable to the rest of the industry: QTWO outperforms 56.00% of its industry peers.
The Debt to FCF ratio of QTWO is 10.05, which is on the high side as it means it would take QTWO, 10.05 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 10.05, QTWO perfoms like the industry average, outperforming 50.18% of the companies in the same industry.
QTWO has a Debt/Equity ratio of 1.06. This is a high value indicating a heavy dependency on external financing.
QTWO has a Debt to Equity ratio of 1.06. This is in the lower half of the industry: QTWO underperforms 76.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | 10.05 | ||
| Altman-Z | 2.75 |
ROIC/WACCN/A
WACC9.73%
2.3 Liquidity
A Current Ratio of 2.38 indicates that QTWO has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.38, QTWO is doing good in the industry, outperforming 68.73% of the companies in the same industry.
A Quick Ratio of 2.38 indicates that QTWO has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.38, QTWO is doing good in the industry, outperforming 69.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.38 | ||
| Quick Ratio | 2.38 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 115.48% over the past year.
QTWO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 29.30% yearly.
QTWO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.98%.
Measured over the past years, QTWO shows a very strong growth in Revenue. The Revenue has been growing by 20.97% on average per year.
EPS 1Y (TTM)115.48%
EPS 3Y124.78%
EPS 5Y29.3%
EPS Q2Q%57.89%
Revenue 1Y (TTM)8.98%
Revenue growth 3Y15.75%
Revenue growth 5Y20.97%
Sales Q2Q%8.09%
3.2 Future
QTWO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 43.30% yearly.
Based on estimates for the next years, QTWO will show a quite strong growth in Revenue. The Revenue will grow by 11.15% on average per year.
EPS Next Y74.08%
EPS Next 2Y51.52%
EPS Next 3Y43.3%
EPS Next 5YN/A
Revenue Next Year10.5%
Revenue Next 2Y10.96%
Revenue Next 3Y11.15%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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 66.84.
The rest of the industry has a similar Price/Earnings ratio as QTWO.
When comparing the Price/Earnings ratio of QTWO to the average of the S&P500 Index (28.05), we can say QTWO is valued expensively.
The Price/Forward Earnings ratio is 33.32, which means the current valuation is very expensive for QTWO.
QTWO's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.07, QTWO is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.84 | ||
| Fwd PE | 33.32 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QTWO is on the same level as its industry peers.
QTWO's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 74.81 | ||
| EV/EBITDA | 1385.06 |
4.3 Compensation for Growth
QTWO's 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 43.30% in the coming years.
PEG (NY)0.9
PEG (5Y)2.28
EPS Next 2Y51.52%
EPS Next 3Y43.3%
5. Dividend
5.1 Amount
QTWO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Q2 HOLDINGS INC
NYSE:QTWO (5/31/2024, 7:04:00 PM)
After market: 60.82 0 (0%)60.82
-0.23 (-0.38%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap3.66B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.84 | ||
| Fwd PE | 33.32 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.9
PEG (5Y)2.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.69% | ||
| ROE | -17.66% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 48.9% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.06 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.38 | ||
| Quick Ratio | 2.38 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)115.48%
EPS 3Y124.78%
EPS 5Y
EPS Q2Q%
EPS Next Y74.08%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)8.98%
Revenue growth 3Y15.75%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y