Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Q2 Holdings, Inc. (NYSE:QTWO) share price has soared 130% in the last 1 year. Most would be very happy with that, especially in just one year! In more good news, the share price has risen 24% in thirty days. On the other hand, longer term shareholders have had a tougher run, with the stock falling 48% in three years.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Q2 Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Q2 Holdings saw its revenue grow by 10%. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 130%. The business will need a lot more growth to justify that increase. It's quite likely that the market is considering other factors, not just revenue growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Q2 Holdings is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Q2 Holdings in this interactive graph of future profit estimates.

A Different Perspective

It's good to see that Q2 Holdings has rewarded shareholders with a total shareholder return of 130% in the last twelve months. Notably the five-year annualised TSR loss of 4% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Q2 Holdings better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Q2 Holdings you should know about.

We will like Q2 Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.