DA Davidson has maintained its Buy recommendation on Q2 Holdings (NYSE: QTWO), assigning a price target of $82.00 after the financial technology company released fourth-quarter results. That target sits well above the stock's quoted price of $54.95 and falls within a range of analyst targets that span $67 to $100, according to InvestingPro data.
In the quarter, Q2 Holdings delivered total revenue and adjusted EBITDA that exceeded DA Davidson's estimates by 5% and 12%, respectively. The company reported 12-month revenue growth of 13.93%, with total revenue reaching $769.63 million. DA Davidson also highlighted that the quarter produced the company's second strongest bookings result on record, a datapoint the firm viewed positively.
Management provided formal guidance for fiscal 2026, and DA Davidson noted that the midpoints of the company's revenue and adjusted EBITDA outlook are above consensus expectations. The brokerage said it will review its notes and update its forecasts for Q2 Holdings in the near term while keeping the Buy rating and the $82.00 price target in place.
Not all metrics were uniformly strong. Q2 Holdings reported a sizable miss on earnings per share relative to analyst forecasts for the quarter. Nevertheless, the company posted encouraging operational trends elsewhere: subscription revenue rose 16% year-over-year, and the business continued to expand its gross and EBITDA margins.
Other brokerages have adjusted their price targets following the quarter. Truist Securities trimmed its target to $75 while maintaining a Buy rating, attributing the change in part to valuation compression across the software sector. Needham also reduced its target to $70 and retained a Buy rating. Both firms kept their positive stances despite the company's robust fourth-quarter results, and their revisions were presented by the brokers as reflecting broader market valuation concerns rather than company-specific problems.
Investors evaluating Q2 Holdings should weigh the mixed elements of the quarter: revenue and adjusted EBITDA outperformance, strong subscription growth and margin expansion on the one hand, and an EPS shortfall plus lingering sector valuation pressure on the other. DA Davidson's planned forecast updates will provide additional clarity when released.
Valuation tool note: For investors seeking a quantitative perspective, a Fair Value calculator that uses a compilation of industry valuation models is available to compare current market prices against modeled intrinsic values.