NYSE:QTWO

Stock Analysis Report

Executive Summary

Q2 Holdings, Inc. provides cloud-based digital banking solutions to regional and community financial institutions (RCFIs) in the United States.

Snowflake

Mediocre balance sheet with limited growth.


Similar Companies

Share Price & News

How has Q2 Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QTWO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.5%

QTWO

2.2%

US Software

0.9%

US Market


1 Year Return

61.7%

QTWO

39.3%

US Software

16.8%

US Market

Return vs Industry: QTWO exceeded the US Software industry which returned 39.3% over the past year.

Return vs Market: QTWO exceeded the US Market which returned 16.8% over the past year.


Shareholder returns

QTWOIndustryMarket
7 Day6.5%2.2%0.9%
30 Day13.2%10.5%4.5%
90 Day-12.4%4.6%6.2%
1 Year61.7%61.7%41.5%39.3%19.4%16.8%
3 Year155.4%155.4%126.3%117.4%47.5%38.0%
5 Year319.2%319.2%176.1%156.3%62.0%44.1%

Price Volatility Vs. Market

How volatile is Q2 Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Q2 Holdings undervalued compared to its fair value and its price relative to the market?

10.14x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: QTWO ($80.44) is trading above our estimate of fair value ($40.98)

Significantly Below Fair Value: QTWO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: QTWO is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: QTWO is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate QTWO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: QTWO is overvalued based on its PB Ratio (10.1x) compared to the US Software industry average (6x).


Next Steps

Future Growth

How is Q2 Holdings forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

4.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QTWO is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: QTWO is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: QTWO is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: QTWO's revenue (20.9% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: QTWO's revenue (20.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QTWO's Return on Equity is forecast to be low in 3 years time (7.5%).


Next Steps

Past Performance

How has Q2 Holdings performed over the past 5 years?

-18.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QTWO has high quality earnings.

Growing Profit Margin: QTWO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: QTWO is unprofitable, and losses have increased over the past 5 years at a rate of -18.4% per year.

Accelerating Growth: Unable to compare QTWO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: QTWO is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (25.8%).


Return on Equity

High ROE: QTWO has a negative Return on Equity (-17.57%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Q2 Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: QTWO's short term assets ($688.8M) exceeds its short term liabilities ($116.2M)

Long Term Liabilities: QTWO's short term assets ($688.8M) exceeds its long term liabilities (479.7M)


Debt to Equity History and Analysis

Debt Level: QTWO's debt to equity ratio (109.8%) is considered high.

Reducing Debt: QTWO's debt to equity ratio has increased from 0.06% to 109.8% over the past 5 years.


Balance Sheet

Inventory Level: QTWO has a low level of unsold assets or inventory.

Debt Coverage by Assets: QTWO's debt is covered by short term assets (assets are 1.6x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: QTWO has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if QTWO has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Q2 Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate QTWO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate QTWO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if QTWO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if QTWO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of QTWO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Q2 Holdings's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

Matt Flake (47yo)

6.1yrs

Tenure

US$5,216,787

Compensation

Mr. Matthew P. Flake, also known as Matt, has been the Chief Executive Officer of Q2 Holdings, Inc. since October 2013 and its President since March 6, 2019. Mr. Flake has been Chief Executive Officer of Q ...


CEO Compensation Analysis

Compensation vs Market: Matt's total compensation ($USD5.22M) is about average for companies of similar size in the US market ($USD5.10M).

Compensation vs Earnings: Matt's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.7yrs

Average Tenure

47yo

Average Age

Experienced Management: QTWO's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

7.8yrs

Average Tenure

61yo

Average Age

Experienced Board: QTWO's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$8,340,00012 Jun 19
Matthew Flake
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares120,000
Max PriceUS$69.50
SellUS$1,373,17214 Mar 19
Matthew Flake
EntityIndividual
Role
Chief Executive Officer
CEO, President & Director
Shares20,105
Max PriceUS$68.30
SellUS$4,688,98405 Mar 19
Adams Street Partners, LLC
EntityCompany
Shares65,713
Max PriceUS$71.36

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.1%.


Management Team

  • Hank Seale (57yo)

    Founder & Executive Chairman

    • Tenure: 0yrs
    • Compensation: US$219.00k
  • Anderson Blue (47yo)

    Executive VP & CTO

    • Tenure: 8.9yrs
    • Compensation: US$1.78m
  • Matt Flake (47yo)

    CEO, President & Director

    • Tenure: 6.1yrs
    • Compensation: US$5.22m
  • Suzette Junier

    Chief Compliance Officer & Chief Privacy Officer

    • Tenure: 2.6yrs
  • Boogie Wittenburg (47yo)

    Executive Vice President of Customer Experience

    • Tenure: 0.8yrs
    • Compensation: US$2.49m
  • Will Furrer (51yo)

    Chief Strategy Officer

    • Tenure: 0yrs
    • Compensation: US$1.75m
  • Jennifer Harris (51yo)

    Chief Financial Officer

    • Tenure: 5.9yrs
    • Compensation: US$2.27m
  • Lou Senko

    Chief Information Officer & Senior VP

    • Tenure: 2.7yrs
  • Rekha Garapati (43yo)

    Executive Vice President of Products & Operations

    • Tenure: 0.8yrs
  • Josh Yankovich

    Investor Contact

    • Tenure: 0yrs

Board Members

  • Jim Offerdahl (63yo)

    Independent Director

    • Tenure: 8.9yrs
    • Compensation: US$175.00k
  • Hank Seale (57yo)

    Founder & Executive Chairman

    • Tenure: 0yrs
    • Compensation: US$219.00k
  • Mike Maples (76yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$163.00k
  • Jeff Diehl (49yo)

    Independent Director

    • Tenure: 12.3yrs
    • Compensation: US$161.50k
  • Chuck Doyle (84yo)

    Independent Director

    • Tenure: 8.5yrs
    • Compensation: US$176.50k
  • Jim Schaper (67yo)

    Lead Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$196.50k
  • Matt Flake (47yo)

    CEO, President & Director

    • Tenure: 6.1yrs
    • Compensation: US$5.22m
  • R. Atchison (59yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$164.00k

Company Information

Q2 Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Q2 Holdings, Inc.
  • Ticker: QTWO
  • Exchange: NYSE
  • Founded: 2005
  • Industry: Application Software
  • Sector: Software
  • Market Cap: US$3.874b
  • Shares outstanding: 48.16m
  • Website: https://www.q2ebanking.com

Number of Employees


Location

  • Q2 Holdings, Inc.
  • 13785 Research Boulevard
  • Suite 150
  • Austin
  • Texas
  • 78750
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QTWONYSE (New York Stock Exchange)YesCommon StockUSUSDMar 2014

Biography

Q2 Holdings, Inc. provides cloud-based digital banking solutions to regional and community financial institutions (RCFIs) in the United States. It offers Q2 Digital Banking and Transactions, a browser-base ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/20 00:42
End of Day Share Price2019/11/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.