The 3.4% return this week takes Q2 Holdings' (NYSE:QTWO ...

Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Q2 Holdings, Inc. (NYSE:QTWO) share price has soared 152% return in just a single year. It's also good to see the share price up 24% over the last quarter. However, the stock hasn't done so well in the longer term, with the stock only up 2.2% in three years.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

See our latest analysis for Q2 Holdings

Given that Q2 Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year Q2 Holdings saw its revenue grow by 9.5%. That's not a very high growth rate considering it doesn't make profits. In contrast, the share price took off during the year, gaining 152%. The business will need a lot more growth to justify that increase. It's quite likely that the market is considering other factors, not just revenue growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth

Q2 Holdings is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling Q2 Holdings stock, you should check out this free report showing analyst consensus estimates for future profits.

We're pleased to report that Q2 Holdings shareholders have received a total shareholder return of 152% over one year. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for Q2 Holdings that you should be aware of.

We will like Q2 Holdings better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.