William Blair analyst Christopher Kennedy has reiterated their bullish stance on QTWO stock, giving a Buy rating today.
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Christopher Kennedy has given his Buy rating due to a combination of factors that highlight Q2 Holdings’ strong financial performance and growth potential. Despite a 19% decline in share price year-to-date, the company has demonstrated robust fundamentals, with March-quarter revenue and adjusted EBITDA surpassing the high end of guidance. Management has raised its 2025 guidance, reflecting confidence in the company’s trajectory.
Q2 Holdings’ strategic shift towards high-margin subscription revenue is a key driver of its growth, now constituting 81% of the business and showing significant year-over-year growth. The company’s subscription revenue retention rates and internal initiatives are contributing to improved margins and free cash flow. Additionally, the company’s strong renewal and cross-sale pipeline, along with successful renewals with major clients, further supports the positive outlook. These elements combined suggest that Q2 Holdings is well-positioned to achieve its long-term financial goals, justifying the Buy rating.
In another report released today, Needham also reiterated a Buy rating on the stock with a $110.00 price target.
Based on the recent corporate insider activity of 90 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of QTWO in relation to earlier this year.