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Q2 Holdings (QTWO) Q1 Earnings Report Preview: What To Look For


Kayode Omotosho /
2022/05/02 3:56 am EDT

Banking software provider Q2 (NYSE:QTWO) will be announcing earnings results today after market hours. Here's what to look for.

Last quarter Q2 Holdings reported revenues of $131.8 million, up 21% year on year, missing analyst expectations by 0.19%. It was a weak quarter for the company, with an underwhelming revenue guidance for the next year.

Is Q2 Holdings buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Q2 Holdings's revenue to grow 13.6% year on year to $132.5 million, slowing down from the 26.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.06 per share.

Q2 Holdings Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St's revenue estimates twice over the last two years.

With Q2 HoldingsĀ being the first among its peers to report earnings this season, we don't have anywhere else to look at to get a hint at how this quarter will unravel for vertical software stocks, but the technology segment has been facing declining investor sentiment following the fears around raising interest rates, with the stocks down on average 15.4% over the last month. Q2 Holdings is down 16.6% during the same time, and is heading into the earnings with analyst price target of $89.3, compared to share price of $51.73.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.