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Q2 HOLDINGS INC (QTWO) Stock Fundamental Analysis

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

90.94  -0.5 (-0.55%)

After market: 90.75 -0.19 (-0.21%)

Fundamental Rating

4

QTWO gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 282 industry peers in the Software industry. QTWO scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. QTWO is not overvalued while it is showing excellent growth. This is an interesting combination.


Dividend Valuation Growth Profitability Health

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2

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.
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

The Return On Assets of QTWO (-1.48%) is better than 60.64% of its industry peers.
QTWO has a Return On Equity of -3.66%. This is in the better half of the industry: QTWO outperforms 61.70% of its industry peers.
Industry RankSector Rank
ROA -1.48%
ROE -3.66%
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

With a Gross Margin value of 51.79%, QTWO is not doing good in the industry: 66.31% of the companies in the same industry are doing better.
QTWO's Gross Margin has been stable in the last couple of years.
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 51.79%
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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5

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.
QTWO has a better debt/assets ratio than last year.
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 4.22 indicates that QTWO is not in any danger for bankruptcy at the moment.
QTWO has a better Altman-Z score (4.22) than 65.25% of its industry peers.
The Debt to FCF ratio of QTWO is 3.56, which is a good value as it means it would take QTWO, 3.56 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.56, QTWO is in the better half of the industry, outperforming 62.06% of the companies in the same industry.
A Debt/Equity ratio of 0.55 indicates that QTWO is somewhat dependend on debt financing.
The Debt to Equity ratio of QTWO (0.55) is worse than 66.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.55
Debt/FCF 3.56
Altman-Z 4.22
ROIC/WACCN/A
WACC10.36%
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

QTWO has a Current Ratio of 1.43. This is a normal value and indicates that QTWO is financially healthy and should not expect problems in meeting its short term obligations.
QTWO's Current ratio of 1.43 is in line compared to the rest of the industry. QTWO outperforms 46.10% of its industry peers.
QTWO has a Quick Ratio of 1.43. This is a normal value and indicates that QTWO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.43, QTWO is in line with its industry, outperforming 46.10% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.43
Quick Ratio 1.43
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 107.73% 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 33.28% on average per year.
Looking at the last year, QTWO shows a quite strong growth in Revenue. The Revenue has grown by 13.12% in the last year.
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)107.73%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%80%
Revenue 1Y (TTM)13.12%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%14.64%

3.2 Future

The Earnings Per Share is expected to grow by 23.58% 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 11.47% yearly.
EPS Next Y35.9%
EPS Next 2Y25.18%
EPS Next 3Y23.58%
EPS Next 5YN/A
Revenue Next Year12.64%
Revenue Next 2Y11.64%
Revenue Next 3Y11.47%
Revenue Next 5YN/A

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 48.37, the valuation of QTWO can be described as expensive.
61.35% of the companies in the same industry are more expensive than QTWO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of QTWO to the average of the S&P500 Index (27.50), we can say QTWO is valued expensively.
QTWO is valuated quite expensively with a Price/Forward Earnings ratio of 35.39.
Compared to the rest of the industry, the Price/Forward Earnings ratio of QTWO is on the same level as its industry peers.
QTWO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 36.44.
Industry RankSector Rank
PE 48.37
Fwd PE 35.39
QTWO Price Earnings VS Forward Price EarningsQTWO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

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 66.31% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 40.9
EV/EBITDA 117.62
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 23.58% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.35
PEG (5Y)1.45
EPS Next 2Y25.18%
EPS Next 3Y23.58%

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0

5. Dividend

5.1 Amount

QTWO does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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Q2 HOLDINGS INC

NYSE:QTWO (7/18/2025, 8:06:13 PM)

After market: 90.75 -0.19 (-0.21%)

90.94

-0.5 (-0.55%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)05-07 2025-05-07/amc
Earnings (Next)07-30 2025-07-30/amc
Inst Owners106.12%
Inst Owner Change0%
Ins Owners0.53%
Ins Owner Change-7.84%
Market Cap5.67B
Analysts77.39
Price Target102.35 (12.55%)
Short Float %5.27%
Short Ratio5.74
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)11.46%
Min EPS beat(2)9.95%
Max EPS beat(2)12.97%
EPS beat(4)4
Avg EPS beat(4)16.47%
Min EPS beat(4)9.95%
Max EPS beat(4)23.75%
EPS beat(8)7
Avg EPS beat(8)13.66%
EPS beat(12)10
Avg EPS beat(12)34.76%
EPS beat(16)12
Avg EPS beat(16)27.94%
Revenue beat(2)0
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-0.35%
Max Revenue beat(2)-0.26%
Revenue beat(4)0
Avg Revenue beat(4)-0.62%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)-0.26%
Revenue beat(8)0
Avg Revenue beat(8)-1.1%
Revenue beat(12)0
Avg Revenue beat(12)-1.5%
Revenue beat(16)0
Avg Revenue beat(16)-1.47%
PT rev (1m)0.68%
PT rev (3m)-8.15%
EPS NQ rev (1m)0.46%
EPS NQ rev (3m)3.36%
EPS NY rev (1m)0.23%
EPS NY rev (3m)5.32%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.97%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.66%
Valuation
Industry RankSector Rank
PE 48.37
Fwd PE 35.39
P/S 7.86
P/FCF 40.9
P/OCF 34.16
P/B 10.39
P/tB N/A
EV/EBITDA 117.62
EPS(TTM)1.88
EY2.07%
EPS(NY)2.57
Fwd EY2.83%
FCF(TTM)2.22
FCFY2.45%
OCF(TTM)2.66
OCFY2.93%
SpS11.57
BVpS8.76
TBVpS-0.93
PEG (NY)1.35
PEG (5Y)1.45
Profitability
Industry RankSector Rank
ROA -1.48%
ROE -3.66%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 51.79%
FCFM 19.22%
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 Turnover0.53
Health
Industry RankSector Rank
Debt/Equity 0.55
Debt/FCF 3.56
Debt/EBITDA 6.35
Cap/Depr 42.02%
Cap/Sales 3.79%
Interest Coverage N/A
Cash Conversion 348.23%
Profit Quality N/A
Current Ratio 1.43
Quick Ratio 1.43
Altman-Z 4.22
F-Score6
WACC10.36%
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)107.73%
EPS 3Y72.41%
EPS 5Y33.28%
EPS Q2Q%80%
EPS Next Y35.9%
EPS Next 2Y25.18%
EPS Next 3Y23.58%
EPS Next 5YN/A
Revenue 1Y (TTM)13.12%
Revenue growth 3Y11.78%
Revenue growth 5Y17.16%
Sales Q2Q%14.64%
Revenue Next Year12.64%
Revenue Next 2Y11.64%
Revenue Next 3Y11.47%
Revenue Next 5YN/A
EBIT growth 1Y74.8%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year84.25%
EBIT Next 3Y38.03%
EBIT Next 5YN/A
FCF growth 1Y766.9%
FCF growth 3Y169.21%
FCF growth 5YN/A
OCF growth 1Y268.96%
OCF growth 3Y63.45%
OCF growth 5Y198.8%