UPDATE: Canaccord Genuity Starts Q2 Holdings (QTWO) at Buy

(Updated - April 14, 2014 1:28 PM EDT)

Canaccord Genuity initiated coverage on Q2 Holdings (NYSE: QTWO) with a Buy rating and a price target of $17.00.

Analyst Richard Davis said, "In our opinion, Q2 Holdings could be one of the quiet winners of the recent IPO class. The firm sells customer-facing banking applications, competing largely with legacy software vendors and aging custom code. Q2 signs 5+ year subscriptions (excellent visibility), is growing revenues ~30%, but won’t likely break even until sometime in 2017. If Q2 can articulate and demonstrate a clear and consistent path to profitability, the stock could get re-valued into the 25%+ growth SMID cap cloud cohort, which implies a 7-9x forward revenue multiple. As is our custom, our price target is more conservative and assumes a modest deterioration in the EV/revenue multiple, but a 20% appreciation in the face of 30% revenue growth. We are initiating coverage of QTWO with a BUY."

For an analyst ratings summary and ratings history on Q2 Holdings click here. For more ratings news on Q2 Holdings click here.

Shares of Q2 Holdings closed at $13.68 yesterday.

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