Q2 HOLDINGS INC (QTWO)
US74736L1098 - Common Stock
Overall QTWO gets a fundamental rating of 4 out of 10. We evaluated QTWO against 276 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
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.
QTWO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of QTWO (-5.72%) is comparable to the rest of the industry.
With a Return On Equity value of -15.34%, QTWO perfoms like the industry average, outperforming 54.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -5.72% | ||
| ROE | -15.34% | ||
| 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
With a Gross Margin value of 48.44%, QTWO is not doing good in the industry: 68.61% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of QTWO has remained more or less at the same level.
QTWO does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 48.44% |
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.
The debt/assets ratio for QTWO has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.31 indicates that QTWO is not a great score, but indicates only limited risk for bankruptcy at the moment.
QTWO's Altman-Z score of 2.31 is in line compared to the rest of the industry. QTWO outperforms 54.74% of its industry peers.
The Debt to FCF ratio of QTWO is 12.37, which is on the high side as it means it would take QTWO, 12.37 years of fcf income to pay off all of its debts.
QTWO has a Debt to FCF ratio (12.37) which is comparable to the rest of the industry.
QTWO has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of QTWO (1.09) is worse than 74.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 12.37 | ||
| Altman-Z | 2.31 |
ROIC/WACCN/A
WACC9.2%
2.3 Liquidity
QTWO has a Current Ratio of 2.23. This indicates that QTWO is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of QTWO (2.23) is better than 65.33% of its industry peers.
A Quick Ratio of 2.23 indicates that QTWO has no problem at all paying its short term obligations.
QTWO's Quick ratio of 2.23 is fine compared to the rest of the industry. QTWO outperforms 66.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.23 | ||
| Quick Ratio | 2.23 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 205.77% over the past year.
Measured over the past years, QTWO shows a very strong growth in Earnings Per Share. The EPS has been growing by 29.30% on average per year.
QTWO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.42%.
QTWO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 20.97% yearly.
EPS 1Y (TTM)205.77%
EPS 3Y124.78%
EPS 5Y29.3%
EPS growth Q2Q233.33%
Revenue 1Y (TTM)10.42%
Revenue growth 3Y15.75%
Revenue growth 5Y20.97%
Revenue growth Q2Q10.66%
3.2 Future
Based on estimates for the next years, QTWO will show a very strong growth in Earnings Per Share. The EPS will grow by 48.69% on average per year.
The Revenue is expected to grow by 10.94% on average over the next years. This is quite good.
EPS Next Y66.9%
EPS Next 2Y50.23%
EPS Next 3Y48.69%
EPS Next 5YN/A
Revenue Next Year9.91%
Revenue Next 2Y10.54%
Revenue Next 3Y10.94%
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
With a Price/Earnings ratio of 66.60, QTWO can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as QTWO.
Compared to an average S&P500 Price/Earnings ratio of 24.92, QTWO is valued quite expensively.
Based on the Price/Forward Earnings ratio of 40.16, the valuation of QTWO can be described as expensive.
62.77% of the companies in the same industry are more expensive than QTWO, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of QTWO to the average of the S&P500 Index (21.49), we can say QTWO is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.6 | ||
| Fwd PE | 40.16 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of QTWO is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 79.38 | ||
| EV/EBITDA | N/A |
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 48.69% in the coming years. This may justify a more expensive valuation.
PEG (NY)1
PEG (5Y)2.27
EPS Next 2Y50.23%
EPS Next 3Y48.69%
5. Dividend
5.1 Amount
No dividends for QTWO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Q2 HOLDINGS INC
NYSE:QTWO (4/26/2024, 7:12:31 PM)
After market: 53.28 0 (0%)53.28
+0.39 (+0.74%)
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 Cap3.15B
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)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(16)
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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 | 66.6 | ||
| Fwd PE | 40.16 | ||
| 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)1
PEG (5Y)2.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -5.72% | ||
| ROE | -15.34% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 48.44% | ||
| 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 | 1.09 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.23 | ||
| Quick Ratio | 2.23 | ||
| 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)
Growth
EPS 1Y (TTM)205.77%
EPS 3Y124.78%
EPS 5Y
EPS growth Q2Q
EPS Next Y66.9%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)10.42%
Revenue growth 3Y15.75%
Revenue growth 5Y
Revenue growth 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