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Strength Seen in Q2 Holdings (QTWO): Can Its 15.0% Jump Turn into More Strength?

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Q2 Holdings (QTWO - Free Report) shares ended the last trading session 15% higher at $23.99. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 38.2% loss over the past four weeks.

The upswing in Q2 Holdings share price came after the company in a filing with the US Securities And Exchange Commission revealed that it has minimal risk exposure to the recently collapsed two US banks – Silicon Valley Bank and Signature Bank.

The company in the filing stated that it maintains less than $5,000 cash deposits while holds no securities at the Silicon Valley Bank. In the Signature Bank, the company maintains no cash deposits as well as no securities. Talking about the impact on revenues due to the collapse of the two aforementioned banks, Q2 Holdings revealed that business from Silicon Valley Bank represented less than one half of one percent of its 2022 revenues. On the other hand, Signature Bank is not a customer of the company.

This provider of online banking software is expected to post quarterly earnings of $0.04 per share in its upcoming report, which represents a year-over-year change of +33.3%. Revenues are expected to be $150.24 million, up 12.1% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Q2 Holdings, the consensus EPS estimate for the quarter has been revised 39.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on QTWO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Q2 Holdings belongs to the Zacks Business - Software Services industry. Another stock from the same industry, Tyler Technologies (TYL - Free Report) , closed the last trading session 0.9% higher at $325.07. Over the past month, TYL has returned -1.2%.

Tyler Technologies' consensus EPS estimate for the upcoming report has changed +1.9% over the past month to $1.80. Compared to the company's year-ago EPS, this represents a change of -5.3%. Tyler Technologies currently boasts a Zacks Rank of #3 (Hold).

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