Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:QTWO - US74736L1098 - Common Stock
73.52 USD
+0.87 (+1.2%)
73.52 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. QTWO has only an average score on both its financial health and profitability. QTWO is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
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.
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
QTWO has a better Return On Assets (2.22%) than 63.93% of its industry peers.
QTWO has a Return On Equity of 5.09%. This is in the better half of the industry: QTWO outperforms 69.29% of its industry peers.
QTWO's Return On Invested Capital of 3.00% is fine compared to the rest of the industry. QTWO outperforms 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
Looking at the Profit Margin, with a value of 4.12%, QTWO is in the better half of the industry, outperforming 63.93% of the companies in the same industry.
QTWO's Operating Margin of 3.43% is fine compared to the rest of the industry. QTWO outperforms 66.43% of its industry peers.
QTWO has a Gross Margin of 53.37%. This is in the lower half of the industry: QTWO underperforms 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so QTWO is destroying value.
QTWO has more shares outstanding than it did 1 year ago.
The number of shares outstanding for QTWO has been increased compared to 5 years ago.
The debt/assets ratio for QTWO has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 3.39 indicates that QTWO is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 3.39, QTWO is doing good in the industry, outperforming 62.14% of the companies in the same industry.
QTWO has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 3.22 | ||
| Altman-Z | 3.39 |
ROIC/WACC0.29
WACC10.42%
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.
The Current ratio of QTWO (0.97) is worse than 75.71% of its industry peers.
A Quick Ratio of 0.97 indicates that QTWO may have some problems paying its short term obligations.
QTWO has a worse Quick ratio (0.97) than 74.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
QTWO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 71.97%, which is quite impressive.
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 13.93%.
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
Based on estimates for the next years, QTWO will show a quite strong growth in Revenue. The Revenue will grow by 11.71% on average per year.
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
The Price/Earnings ratio is 32.39, which means the current valuation is very expensive for QTWO.
Based on the Price/Earnings ratio, QTWO is valued a bit cheaper than 61.79% of the companies in the same industry.
QTWO's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 26.49.
The Price/Forward Earnings ratio is 25.93, which means the current valuation is very expensive for QTWO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of QTWO indicates a somewhat cheap valuation: QTWO is cheaper than 65.71% of the companies listed in the same industry.
QTWO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.69.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.39 | ||
| Fwd PE | 25.93 |
4.2 Price Multiples
QTWO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. QTWO is cheaper than 61.43% of the companies in the same industry.
71.43% 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 | 29.93 | ||
| EV/EBITDA | 53.14 |
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)0.69
PEG (5Y)0.97
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 |
73.52
+0.87 (+1.2%)
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 Cap4.60B
Revenue(TTM)769.63M
Net Income(TTM)31.73M
Analysts79.13
Price Target90.7 (23.37%)
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 | 32.39 | ||
| Fwd PE | 25.93 | ||
| P/S | 5.97 | ||
| P/FCF | 29.93 | ||
| P/OCF | 25.43 | ||
| P/B | 7.38 | ||
| P/tB | 165.97 | ||
| EV/EBITDA | 53.14 |
EPS(TTM)2.27
EY3.09%
EPS(NY)2.84
Fwd EY3.86%
FCF(TTM)2.46
FCFY3.34%
OCF(TTM)2.89
OCFY3.93%
SpS12.31
BVpS9.96
TBVpS0.44
PEG (NY)0.69
PEG (5Y)0.97
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 | 3.39 |
F-Score7
WACC10.42%
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 32.39 and the Price/Book (PB) ratio is 7.38.