NCNO - Q2 Holdings upgraded to Outperform nCino cut to Neutral at Baird

2023-07-24 14:02:57 ET

Q2 Holdings ( NYSE: QTWO ) gained 4.6% in Monday afternoon trading after Baird analyst Joe Vruwink upgraded the payment technology stock to Outperform from Neutral as the company's incremental margins are at their highest levels in years.

Meanwhile, he downgraded nCino ( NASDAQ: NCNO ) to Neutral from Outperform as its 2024 earnings estimates "appear to be in a good place."

Q2 Holdings ( QTWO ) stock is "well off its lows" but is still about 10% below the S&P 500 year-to-date performance, Vruwink said. Demand in its core digital banking business has exceeded expectations during FY2023 and adjusted EBITDA forecasts have increased by 17% since the start of the year.

The Outperform rating contrasts with the SA Quant rating of Hold and aligns with the average Wall Street rating of Buy.

For nCino ( NCNO ), the stock has jumped after a report that it's considering options after receiving takeover interest from private equity firms. That movement has pulled ahead the upside that Vruwick expected over the next twelve months, resulting in a more balanced risk/reward profile.

The downgrade to Neutral, aligns with the SA Quant rating of Hold and diverges from the average Wall Street rating of Buy.

nCino ( NCNO ) stock rose 0.9% in Monday afternoon trading.

More on nCino and Q2 Holdings:

• nCino: A Takeover Might Be at a Not-So-Generous Valuation
• Alkami, Q2 Holdings nab Buy ratings at Goldman in new coverage
• Q2 Holdings gain amid report of takeover interest for peer nCino
• Q2 Holdings: Eyes on Investor Sentiment and M&A Opportunities

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