We recently compiled a list of the 10 Worst Performing Fintech Stocks to Buy According to Analysts. In this article, we are going to take a look at where Q2 Holdings, Inc. (NYSE:QTWO) stands against the other fintech stocks.
Mark Palmer, Managing Director at Benchmark, joined Yahoo Finance Live on February 15, 2025, to discuss the fintech sector. He emphasized that it is currently a “stock picker’s sector.” Palmer noted that valuations in the fintech space are not connected with the growth potential of many companies.
However, he noted that not all of the fintech companies are equally positioned for success. He believes that companies heavily tied to credit, such as neobanks and online lenders, continue to be vulnerable because of growing concerns about consumer credit tightening.
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Palmer noted that some fintech companies are well-positioned to help consumers during a difficult time. For instance, companies that serve as a substitute for traditional banking, particularly for lower-income individuals who face barriers at traditional banks. He believes this type of value-added service is sustainable and companies that offer such services could experience stock boosts.
In the fintech sector, careful stock selection could be crucial. Analysts and experts see opportunities for growth in companies that offer meaningful consumer solutions.
Methodology
To compile our list of the 10 worst-performing fintech stocks to buy according to analysts, we looked for fintech companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of fintech stocks. Then we looked for the worst-performing stocks in the fintech sector and narrowed down our list to stocks that have fallen by at least 12% year-to-date as of February 28, 2025. Next, we focused on the top fintech stocks that analysts believe have the most potential for growth. Finally, we ranked the 10 worst-performing fintech stocks to buy based on their average price target upside potential according to analysts, as of February 28, 2025.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A finance professional at their computer logging into the company’s branded digital banking platform.
Q2 Holdings, Inc. (NYSE:QTWO)
Year-to-Date Performance: -12.23%
Average Price Target Upside Potential According to Analysts: 24.76%
Number of Hedge Fund Holders: 29
Q2 Holdings, Inc. (NYSE:QTWO) is a leading provider of cloud-based digital banking and lending solutions to banks, credit unions, and financial technology companies in the US and internationally. The company offers a range of solutions including digital banking, digital onboarding, risk and fraud management, relationship pricing and profitability, lending, and embedded finance. Through its comprehensive solution set, Q2 Holdings, Inc. (NYSE:QTWO) enables its customers to easily onboard, grow, and serve their consumer, small business, and corporate clients. QTWO is one of the worst-performing stocks to buy in the fintech sector.
On February 13, 2025, Citi analyst Andrew Schmidt raised the price target for Q2 Holdings, Inc. (NYSE:QTWO) to $100 from $96 and kept a ‘Neutral’ rating. This reflects the company’s strong performance in Q4 2024, driven by significant client renewal activity and high demand. Q2 Holdings, Inc. (NYSE:QTWO) secured seven Tier 1/Enterprise deals during the quarter. The company also achieved record cross-selling and renewals and nearly doubled new digital banking customers among Tier 2/3 financial institutions for 2024. Subscription annual recurring revenue grew about 15% year-over-year, supported by the company’s strong booking activity. Schmidt noted that Q2 Holdings, Inc. (NYSE:QTWO) has the potential to further penetrate the market, building on its success in securing Tier 1/enterprise clients over the past two years. Q2 Holdings, Inc. (NYSE:QTWO) is positioned well in the market due to the limited availability of high-quality digital solutions, especially in the commercial sector.
Overall, QTWO ranks 10th on our list of the worst-performing fintech stocks to buy according to analysts. While we acknowledge the potential of QTWO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than QTWO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
