Q2 (NYSE:QTWO) Shares Gap Down Following Weak Earnings

Key Points

• Q2 shares gapped down after reporting Q2 EPS of $0.63 versus $0.71 expected (a miss), although revenue of $216.5M slightly beat estimates and was up 14.1% year-over-year.
• Analysts remain broadly positive with a consensus rating of “Moderate Buy” and an average price target of $77.33, even as some firms trimmed targets in recent notes.
• Significant insider selling occurred—CFO Jonathan Price and another executive each sold ~31–32K shares, and insiders sold 411,087 shares (~$20.7M) in the last quarter, lowering their ownership to about 3%.

Q2 Holdings, Inc. (NYSE:QTWO - Get Free Report) shares gapped down prior to trading on Thursday following a dissappointing earnings announcement. The stock had previously closed at $52.51, but opened at $47.28. Q2 shares last traded at $49.2020, with a volume of 253,072 shares.

The technology company reported $0.63 EPS for the quarter, missing the consensus estimate of $0.71 by ($0.08). The company had revenue of $216.51 million during the quarter, compared to analysts' expectations of $214.36 million. Q2 had a return on equity of 12.52% and a net margin of 6.54%.The business's revenue for the quarter was up 14.1% compared to the same quarter last year. During the same period last year, the company earned $0.07 earnings per share.

Analysts Set New Price Targets

Several analysts have recently commented on QTWO shares. DA Davidson reissued a "buy" rating and issued a $82.00 price objective on shares of Q2 in a research note on Tuesday. Needham & Company LLC reissued a "buy" rating and issued a $70.00 price objective on shares of Q2 in a research note on Thursday. Weiss Ratings reissued a "hold (c-)" rating on shares of Q2 in a research note on Tuesday, April 21st. UBS Group set a $67.00 price objective on Q2 in a research note on Thursday, February 12th. Finally, Royal Bank Of Canada reduced their target price on Q2 from $86.00 to $67.00 and set a "sector perform" rating for the company in a report on Thursday, February 12th. Eight equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the stock. According to data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $77.33.

Insider Buying and Selling at Q2

In other Q2 news, CFO Jonathan Price sold 32,156 shares of the stock in a transaction on Wednesday, March 4th. The stock was sold at an average price of $49.75, for a total transaction of $1,599,761.00. Following the completion of the transaction, the chief financial officer directly owned 197,135 shares of the company's stock, valued at approximately $9,807,466.25. This represents a 14.02% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Kirk L. Coleman sold 31,104 shares of the stock in a transaction on Wednesday, March 4th. The shares were sold at an average price of $49.75, for a total value of $1,547,424.00. Following the transaction, the insider directly owned 262,657 shares of the company's stock, valued at approximately $13,067,185.75. This trade represents a 10.59% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 411,087 shares of company stock valued at $20,702,472 in the last quarter. Insiders own 3.00% of the company's stock.

Hedge Funds Weigh In On Q2

Institutional investors and hedge funds have recently bought and sold shares of the company. Root Financial Partners LLC purchased a new stake in shares of Q2 during the first quarter worth $25,000. Headlands Technologies LLC purchased a new stake in shares of Q2 during the second quarter worth $26,000. Measured Wealth Private Client Group LLC purchased a new stake in shares of Q2 during the third quarter worth $26,000. Cullen Frost Bankers Inc. purchased a new stake in shares of Q2 during the third quarter worth $27,000. Finally, Caitong International Asset Management Co. Ltd purchased a new stake in shares of Q2 during the fourth quarter worth $27,000.

Q2 Stock Down 4.5%

The stock has a market cap of $3.13 billion, a PE ratio of 62.87 and a beta of 1.42. The firm has a 50-day simple moving average of $49.12 and a 200-day simple moving average of $60.70.

About Q2

Q2 Holdings, Inc develops and delivers cloud-based digital banking solutions that enable banks and credit unions to enhance customer and member experiences. The company's core offerings include the Q2 Platform, a comprehensive suite of online and mobile banking applications for retail and commercial customers, as well as digital onboarding, payments, and fraud prevention tools. Q2's platform also provides analytics and reporting capabilities designed to help financial institutions tailor products, optimize workflows, and drive engagement.

Founded in 2004 and headquartered in Austin, Texas, Q2 serves hundreds of financial institutions across the United States and Canada.

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