Yahoo Finance Why Q2 Holdings, Inc. (NYSE:QTWO) Could Be Worth Watching
Q2 Holdings, Inc. (NYSE:QTWO), which is in the software business, and is based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on Q2 Holdings’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for Q2 Holdings
Is Q2 Holdings still cheap?
The stock is currently trading at US$83.14 on the share market, which means it is overvalued by 34% compared to my intrinsic value of $61.82. This means that the opportunity to buy Q2 Holdings at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Q2 Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Q2 Holdings generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 7.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Q2 Holdings, at least in the short term.
What this means for you:
Are you a shareholder? QTWO’s future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe QTWO should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on QTWO for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Q2 Holdings. You can find everything you need to know about Q2 Holdings in the latest infographic research report. If you are no longer interested in Q2 Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.
