Q2 Holdings, Inc.
Q2 Holdings, Inc. Fundamental Analysis
Q2 Holdings, Inc. (QTWO) shows weak financial fundamentals with a PE ratio of 60.92, profit margin of 6.54%, and ROE of 8.62%. The company generates $0.8B in annual revenue with strong year-over-year growth of 11.50%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 49.3/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze QTWO's fundamental strength across five key dimensions:
Efficiency Score
WeakQTWO struggles to generate sufficient returns from assets.
Valuation Score
ModerateQTWO shows balanced valuation metrics.
Growth Score
ExcellentQTWO delivers strong and consistent growth momentum.
Financial Health Score
ExcellentQTWO maintains a strong and stable balance sheet.
Profitability Score
WeakQTWO struggles to sustain strong margins.
Key Financial Metrics
Is QTWO Expensive or Cheap?
P/E Ratio
QTWO trades at 60.92 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, QTWO's PEG of 1.29 indicates fair valuation.
Price to Book
The market values Q2 Holdings, Inc. at 4.79 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 32.38 times EBITDA. This signals the market has high growth expectations.
How Well Does QTWO Make Money?
Net Profit Margin
For every $100 in sales, Q2 Holdings, Inc. keeps $6.54 as profit after all expenses.
Operating Margin
Core operations generate 5.20 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.62 in profit for every $100 of shareholder equity.
ROA
Q2 Holdings, Inc. generates $4.07 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Q2 Holdings, Inc. generates strong operating cash flow of $201.10M, reflecting robust business health.
Free Cash Flow
Q2 Holdings, Inc. generates strong free cash flow of $183.59M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.94 in free cash annually.
FCF Yield
QTWO converts 5.81% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
60.92
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.29
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.79
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.98
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.52
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.02
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How QTWO Stacks Against Its Sector Peers
| Metric | QTWO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 60.92 | 35.19 | Worse (Expensive) |
| ROE | 8.62% | 1155.00% | Weak |
| Net Margin | 6.54% | -127067.00% (disorted) | Weak |
| Debt/Equity | 0.52 | 0.41 | Weak (High Leverage) |
| Current Ratio | 1.02 | 4.71 | Neutral |
| ROA | 4.07% | -314918.00% (disorted) | Weak |
QTWO outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Q2 Holdings, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
69.68%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
58.21%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
18302.32%
Industry Style: Growth, Innovation, High Beta
High Growth