2023-03-15 09:23:09 ET
- Q2 Holdings ( NYSE: QTWO ) stock retreated 6.8% in Wednesday premarket trading after Canaccord analyst Joseph Vafi downgraded the stock to Hold from Buy, citing expectations of softer demand as the regional banking sector comes under pressure amid the fallout from failed lenders Silicon Valley Bank and Signature Bank.
- "Demand for Q2's product set could soften, especially as the company generally focuses on the regional banking mid-market for much of its deal activity," Vafi wrote in a note to clients.
- And against a backdrop of a looming recession, the company's transaction-based sales could slow further, he added. Q2 ( QTWO ) offers cloud-based digital banking platform solutions to regional financial firms throughout the U.S.
- Overall, "while Q2 does indeed have very good visibility into much of its growth on a forward 12- month basis, we believe new deal activity could slow until the banking sector feels it is once again on a firm footing."
- The Hold rating aligns with the Quant system rating of Hold and disagrees with the average Wall Street analyst rating of Buy.
- In January, Baird also cut QTWO to Neutral.
For further details see:
Q2 Holdings stock slides after downgrade at Canaccord on softer demand prospects