QTWO
Q2 Holdings, Inc.
$61.93
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 8.5% above fair value
You pay
$61.93
Bear
$37.46
Fair
$57.06
Bull
$78.55
Bear
$37.46
-39.5%
9% stage 1 growth, 12% discount
Fair
$57.06
-7.9%
15% stage 1 growth, 12% discount
Bull
$78.55
+26.8%
19% stage 1 growth, 12% discount
Adjust Assumptions
14.6%
12.0%
3.0%
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
38%
Implied Market Multiple
28.5x
Market is pricing in (growth)
15.7%
vs 14.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$72.38
Divergence from AlphaVal
21%
Summary
Using a two-stage FCF DCF with 15% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $57.06 per share.
Warnings
Stock-based employee pay equals 167% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions