Banking software provider Q2 (NYSE:QTWO) will be reporting results tomorrow after market close. Here's what to expect.

Q2 Holdings met analysts' revenue expectations last quarter, reporting revenues of $162.1 million, up 10.6% year on year. It was a weaker quarter for the company, with a miss of analysts' billings estimates.

Is Q2 Holdings a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Q2 Holdings's revenue to grow 6.7% year on year to $163.2 million, slowing from the 14.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.28 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Q2 Holdings has missed Wall Street's revenue estimates three times over the last two years.

Looking at Q2 Holdings's peers in the vertical software segment, only Cadence has reported results so far. It met analysts' revenue estimates, posting year-on-year sales declines of 1.2%. The stock was down 1.2% on the results.

Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed inflation signals have led to uncertainty around rate cuts, and while some of the vertical software stocks have fared somewhat better, they have not been spared, with share prices down 3.5% on average over the last month. Q2 Holdings is up 3.8% during the same time and is heading into earnings with an average analyst price target of $54 (compared to the current share price of $52.49).

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