Piper Sandler names Q2 Holdings preferred pick in payments coverage

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โดย Investing.com·US·Read original
Summary · why it matters

Piper Sandler initiated coverage of financial infrastructure and specialized payments companies on Thursday, naming Q2 Holdings its preferred stock with an Overweight rating and an $82 price target that implies about 36% upside from its recent share price. The brokerage cited recurring revenue growth, improving margins and stronger free-cash-flow conversion, and said earnings growth and margin expansion should drive gains without a return to the elevated valuation multiples the stock commanded historically. Q2's subscription revenue accounted for about 83% of total revenue in the second quarter, up from roughly 73% in the first quarter of 2021, while total annualized recurring revenue rose to about $971 million in the second quarter from roughly $401 million in the fourth quarter of 2019 and remaining performance obligations reached $2.76 billion. Piper Sandler also highlighted Q2's core-agnostic platform, which integrates with incumbent banking systems rather than requiring financial institutions to replace their entire technology stack, and noted the company has been selected as the technology provider in more than 90% of customer mergers and acquisitions it has tracked since 2021. The brokerage forecasts adjusted earnings per share of $3.57 in fiscal 2027 and $4.41 in fiscal 2028, growth of about 27% and 24% respectively, with free cash flow of $271 million in fiscal 2027 and $315 million in fiscal 2028. In the same initiation, Jack Henry received a Neutral rating and a $171 price target, while Fidelity National Information Services, Global Payments and WEX were also rated Neutral with price targets of $42, $101 and $209, respectively.

Impact on stocks 7

Digital Finance & Tokenization▲ · 3 stocks
Global Payments Inc
GPN
± MixedCapitalrelevance

Rated Neutral with a $101 price target in the same initiation, only a passing mention.

Financials▲ · 2 stocks
Cloud & Digital Infrastructure▲ · 1 stocks
Q2 Holdings
QTWO
▲ PositiveCapitalrelevance

Piper Sandler named Q2 Holdings its preferred pick with an Overweight rating and $82 price target, citing recurring revenue growth and margin expansion.

Industrials▲ · 1 stocks
Wex Inc
WEX
± MixedCapitalrelevance

Rated Neutral with a $209 price target in the same initiation, only a passing mention.

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