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

Adam Hejl /
2022/08/02 4:15 am EDT
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Banking software provider Q2 (NYSE:QTWO) will be reporting earnings tomorrow after the bell. Here's what you need to know.

Last quarter Q2 Holdings reported revenues of $134 million, up 15% year on year, beating analyst revenue expectations by 1.21%. It was a mixed quarter for the company, with a beat of analysts' estimates but slow revenue growth.

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 13.5% year on year to $140.2 million, slowing down from the 26.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.05 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 only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 1.23%.

Looking at Q2 Holdings's peers in the software segment, only 2U has so far reported results, delivering top-line growth of 1.79% year on year, missing analyst estimates by 5.04%. The stock was down 3.18% on the results. Read our full analysis of 2U's earnings results here.

There has been a stampede out of high valuation technology stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 3.08% over the last month. Q2 Holdings is up 9.54% during the same time, and is heading into the earnings with analyst price target of $68.8, compared to share price of $44.53.

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.