Conestoga Sells 64K Q2 Shares
Key Points
Conestoga sold 64,786 shares during the first quarter.
It owned 1,782,715 shares valued at $84.3 million.
Q2 Holdings represented 1.7% of its reported AUM.
- 10 stocks we like better than Q2 ›
Q2 Holdings (NYSE:QTWO) delivers cloud-based digital banking platforms to regional and community financial institutions across the U.S.
Conestoga Capital Advisors, LLC reported selling 64,786 shares of Q2 Holdings in its April 24 SEC filing.
What happened
According to an SEC filing dated April 24, Conestoga Capital Advisors, LLC reduced its position in Q2 Holdings by 64,786 shares during the first quarter. After the sale, the fund reported holding 1,782,715 Q2 shares worth $84.3 million.
What else to know
- Top holdings after the filing:
- NYSE: RBC: $233.2 million (4.7% of AUM)
- NASDAQ: CWST: $222.5 million (4.4% of AUM)
- NASDAQ: BCPC: $212.1 million (4.2% of AUM)
- NASDAQ: FSV: $195.3 million (3.9% of AUM)
- NASDAQ: ROAD: $183.8 million (3.7% of AUM)
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $794.8 million |
| Net Income (TTM) | $52.0 million |
| Price (as of April 24 market close) | $49.46 |
| One-Year Price Change | -37.5% |
Company Snapshot
Q2 Holdings delivers scalable, cloud-based software to regional and community financial institutions, enabling digital transformation of banking services. The company addresses security, account management, payments, and customer engagement needs.
- Provides cloud-based digital banking solutions, including consumer and commercial banking platforms, security analytics, remote deposit capture, digital account opening, and payment solutions.
- Serves regional and community financial institutions in the United States, targeting banks and credit unions seeking to modernize digital client engagement.
- Operates a recurring revenue SaaS model, generating income primarily from subscription fees and usage-based charges for digital banking and fintech services.
What this transaction means for investors
It’s hard for investors to read much into Conestoga’s stock sale during the first quarter. After all, it trimmed its holding by about 65,000, and still holds 1.8 million shares. This accounts for 1.7% of its reported AUM.
Still, Q2 Holdings’ shares have severely underperformed the overall market. Over the last year, through April 24, the stock returned -37.5%. During this time, the S&P 500 index produced a total return of 31.3%, and the Nasdaq Composite returned 43.8%.
Turning to results, the company generated a solid 14% year-over-year revenue growth last year. Management projected a 10% revenue increase this year.
It reported net income under generally accepted accounting principles of $52 million compared to a $38.5 million loss.
Stock investors have high earnings growth expectations, however. The shares have a price-to-earnings (P/E) ratio of 63. That makes the share price vulnerable to any sign of slowing growth.
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Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Construction Partners, Q2, and RBC Bearings. The Motley Fool recommends FirstService. The Motley Fool has a disclosure policy.
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