With the business potentially at an important milestone, we thought we'd take a closer look at Q2 Holdings, Inc.'s (NYSE:QTWO) future prospects. Q2 Holdings, Inc. provides cloud-based digital solutions to regional and community financial institutions in the United States. The US$6.3b market-cap company posted a loss in its most recent financial year of US$65m and a latest trailing-twelve-month loss of US$57m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Q2 Holdings will turn a profit, with the big question being "when will the company breakeven?" We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Q2 Holdings is bordering on breakeven, according to the 14 American Software analysts. They expect the company to post a final loss in 2025, before turning a profit of US$12m in 2026. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 90% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Q2 Holdings' growth isn't the focus of this broad overview, though, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Q2 Holdings currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in Q2 Holdings' case is 99%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Q2 Holdings, so if you are interested in understanding the company at a deeper level, take a look at Q2 Holdings' company page on Simply Wall St. We've also compiled a list of key aspects you should further research:

1. Valuation: What is Q2 Holdings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Q2 Holdings is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Q2 Holdings's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.