Q2 Holdings, Inc. (NYSE:QTWO) shareholders should be happy to see the share price up 12% in the last month.    But over the last three years we've seen a quite serious decline.  Regrettably, the share price slid 66% in that period.  So it is really good to see an improvement.  Perhaps the company has turned over a new leaf.    

While the last three years has been tough for Q2 Holdings shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.  

Check out our latest analysis for Q2 Holdings

Q2 Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing.  Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip.  Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.  

In the last three years, Q2 Holdings saw its revenue grow by 15% per year, compound.   That's a fairly respectable growth rate.   So some shareholders would be frustrated with the compound loss of 19% per year.  The market must have had really high expectations to be disappointed with this progress.  It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).      

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

NYSE:QTWO Earnings and Revenue Growth November 15th 2023

Q2 Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth.  Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

A Different Perspective

We're pleased to report that Q2 Holdings shareholders have received a total shareholder return of 23% over one year.    Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance.  This makes us a little wary, but the business might have turned around its fortunes.        I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too.   Consider risks, for instance. Every company has them, and we've spotted   1 warning sign for Q2 Holdings  you should know about.    

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.