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Q2 Holdings (QTWO) Hits Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of Q2 Holdings (QTWO - Free Report) ? Shares have been on the move with the stock up 8.5% over the past month. QTWO hit a new 52-week high of $52.25 in the previous session. Q2 Holdings has gained 35.4% since the start of the year compared to the 1.4% move for the Computer and Technology sector and the 7.7% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 14, 2018, Q2 Holdings reported EPS of $0.05 vs.the Zacks Consensus Estimate of $0.02 while it beat the consensus revenue estimate by 0.02%.
For the current fiscal year, Q2 Holdings is expected to post earnings of $0.16 per share on $235.09 million in revenues. This represents a 433.33% change in EPS on a 21.19% change in revenues. For the next fiscal year, the company is expected to earn $0.38 per share on $292.64 million in revenues. This represents a year-over-year change of 139.58% and 24.48%, respectively.
Valuation Metrics
Q2 Holdings may be at a 52-week high right now, but what might the future hold for QTWO? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Q2 Holdings has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 316.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 713.9X versus its peer group's average of 24.8X. Additionally, the stock has a PEG ratio of 15.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Q2 Holdings currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Q2 Holdings meets the list of requirements. Thus, it seems as though QTWO shares could still be poised for more gains ahead.
How Does Q2 Holdings Stack Up to the Competition?
Shares of Q2 Holdings have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Cognizant Technology Solutions (CTSH - Free Report) , CACI International (CACI - Free Report) , and Baidu (BIDU - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Q2 Holdings. Still, the fundamentals for QTWO are promising, and it still has potential despite being at a 52-week high.
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Q2 Holdings (QTWO) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Q2 Holdings (QTWO - Free Report) ? Shares have been on the move with the stock up 8.5% over the past month. QTWO hit a new 52-week high of $52.25 in the previous session. Q2 Holdings has gained 35.4% since the start of the year compared to the 1.4% move for the Computer and Technology sector and the 7.7% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on February 14, 2018, Q2 Holdings reported EPS of $0.05 vs.the Zacks Consensus Estimate of $0.02 while it beat the consensus revenue estimate by 0.02%.
For the current fiscal year, Q2 Holdings is expected to post earnings of $0.16 per share on $235.09 million in revenues. This represents a 433.33% change in EPS on a 21.19% change in revenues. For the next fiscal year, the company is expected to earn $0.38 per share on $292.64 million in revenues. This represents a year-over-year change of 139.58% and 24.48%, respectively.
Valuation Metrics
Q2 Holdings may be at a 52-week high right now, but what might the future hold for QTWO? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Q2 Holdings has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 316.3X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 713.9X versus its peer group's average of 24.8X. Additionally, the stock has a PEG ratio of 15.81. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Q2 Holdings, Inc. Price and Consensus
Q2 Holdings, Inc. Price and Consensus | Q2 Holdings, Inc. Quote
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Q2 Holdings currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Q2 Holdings meets the list of requirements. Thus, it seems as though QTWO shares could still be poised for more gains ahead.
How Does Q2 Holdings Stack Up to the Competition?
Shares of Q2 Holdings have been moving higher, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Cognizant Technology Solutions (CTSH - Free Report) , CACI International (CACI - Free Report) , and Baidu (BIDU - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Q2 Holdings. Still, the fundamentals for QTWO are promising, and it still has potential despite being at a 52-week high.