Latest news with #QTWO
Yahoo
28-05-2025
- Business
- Yahoo
3 Reasons QTWO is Risky and 1 Stock to Buy Instead
Although the S&P 500 is down 1.9% over the past six months, Q2 Holdings's stock price has fallen further to $88.59, losing shareholders 15.4% of their capital. This may have investors wondering how to approach the situation. Is there a buying opportunity in Q2 Holdings, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even though the stock has become cheaper, we're swiping left on Q2 Holdings for now. Here are three reasons why there are better opportunities than QTWO and a stock we'd rather own. A company's long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Q2 Holdings grew its sales at a 11.7% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. For software companies like Q2 Holdings, gross profit tells us how much money remains after paying for the base cost of products and services (typically servers, licenses, and certain personnel). These costs are usually low as a percentage of revenue, explaining why software is more lucrative than other sectors. Q2 Holdings's gross margin is substantially worse than most software businesses, signaling it has relatively high infrastructure costs compared to asset-lite businesses like ServiceNow. As you can see below, it averaged a 51.8% gross margin over the last year. Said differently, Q2 Holdings had to pay a chunky $48.21 to its service providers for every $100 in revenue. Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king. Over the next year, analysts predict Q2 Holdings's cash conversion will fall. Their consensus estimates imply its free cash flow margin of 19.2% for the last 12 months will decrease to 17.1%. Q2 Holdings isn't a terrible business, but it isn't one of our picks. Following the recent decline, the stock trades at 7.2× forward price-to-sales (or $88.59 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We'd recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-05-2025
- Business
- Yahoo
Q2 Holdings's (NYSE:QTWO) Q1: Beats On Revenue, Stock Soars
Banking software provider Q2 (NYSE:QTWO) reported Q1 CY2025 results exceeding the market's revenue expectations , with sales up 14.6% year on year to $189.7 million. Guidance for next quarter's revenue was better than expected at $193 million at the midpoint, 0.8% above analysts' estimates. Its GAAP profit of $0.07 per share was significantly above analysts' consensus estimates. Is now the time to buy Q2 Holdings? Find out in our full research report. Q2 Holdings (QTWO) Q1 CY2025 Highlights: Revenue: $189.7 million vs analyst estimates of $186.6 million (14.6% year-on-year growth, 1.7% beat) EPS (GAAP): $0.07 vs analyst estimates of -$0.01 (significant beat) Adjusted Operating Income: $32.7 million vs analyst estimates of $29.96 million (17.2% margin, 9.1% beat) The company slightly lifted its revenue guidance for the full year to $779.5 million at the midpoint from $775.5 million EBITDA guidance for the full year is $172.5 million at the midpoint, above analyst estimates of $168.1 million Operating Margin: 1.2%, up from -8.6% in the same quarter last year Free Cash Flow Margin: 19.9%, similar to the previous quarter Market Capitalization: $4.94 billion Company Overview Founded in 2004 by Hank Seale, Q2 (NYSE:QTWO) offers software-as-a-service that enables small banks to provide online banking and consumer lending services to their clients. Sales Growth Examining a company's long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last three years, Q2 Holdings grew its sales at a 11.7% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. Q2 Holdings Quarterly Revenue This quarter, Q2 Holdings reported year-on-year revenue growth of 14.6%, and its $189.7 million of revenue exceeded Wall Street's estimates by 1.7%. Company management is currently guiding for a 11.6% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 10.4% over the next 12 months, similar to its three-year rate. Despite the slowdown, this projection is above the sector average and implies the market is forecasting some success for its newer products and services. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Yahoo
08-05-2025
- Business
- Yahoo
Q2 Holdings: Q1 Earnings Snapshot
AUSTIN, Texas (AP) — AUSTIN, Texas (AP) — Q2 Holdings Inc. (QTWO) on Wednesday reported first-quarter net income of $4.8 million. On a per-share basis, the Austin, Texas-based company said it had net income of 7 cents. Earnings, adjusted for stock option expense and amortization costs, were 54 cents per share. The results beat Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 48 cents per share. The provider of online banking software posted revenue of $189.7 million in the period, which also topped Street forecasts. Six analysts surveyed by Zacks expected $186.5 million. For the current quarter ending in June, Q2 Holdings said it expects revenue in the range of $191 million to $195 million. The company expects full-year revenue in the range of $776 million to $783 million. _____ This story was generated by Automated Insights ( using data from Zacks Investment Research. Access a Zacks stock report on QTWO at
Yahoo
04-04-2025
- Business
- Yahoo
3 Russell 2000 Stocks Facing Headwinds
The Russell 2000 is packed with potential breakout stocks, thanks to its focus on smaller companies with high growth potential. However, smaller size also means these businesses often lack the resilience and financial flexibility of large-cap firms, making careful selection crucial. Navigating this part of the market can be tricky, which is why we built StockStory to help you separate the winners from the laggards. Keeping that in mind, here are three Russell 2000 stocks to steer clear of and some alternatives to watch instead. Market Cap: $4.59 billion Founded in 2004 by Hank Seale, Q2 (NYSE:QTWO) offers software-as-a-service that enables small banks to provide online banking and consumer lending services to their clients. Why Are We Hesitant About QTWO? 11.7% annual revenue growth over the last three years was slower than its software peers Bad unit economics and steep infrastructure costs are reflected in its gross margin of 50.9%, one of the worst among software companies Suboptimal cost structure is highlighted by its history of operating losses At $70.01 per share, Q2 Holdings trades at 6.3x forward price-to-sales. If you're considering QTWO for your portfolio, see our FREE research report to learn more. Market Cap: $3.06 billion Founded in 1998 by Douglas L. Becker and based in Miami, Laureate Education (NASDAQ:LAUR) is a global network of higher education institutions. Why Does LAUR Fall Short? Demand for its offerings was relatively low as its number of enrolled students has underwhelmed Demand is forecasted to shrink as its estimated sales for the next 12 months are flat Low returns on capital reflect management's struggle to allocate funds effectively Laureate Education is trading at $19.50 per share, or 14.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why LAUR doesn't pass our bar. Market Cap: $1.03 billion Famous for its viral Las Vegas Sphere venue, Sphere Entertainment (NYSE:SPHR) hosts live entertainment events and distributes content across various media platforms. Why Are We Out on SPHR? Annual revenue growth of 1.7% over the last five years was below our standards for the consumer discretionary sector Cash-burning tendencies make us wonder if it can sustainably generate shareholder value Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders Sphere Entertainment's stock price of $27.40 implies a valuation ratio of 22.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including SPHR in your portfolio, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
