Analysts Slash Q2 Holdings Price Target to $67 After Margin Improvement
RBC Capital reduced its price target on Q2 Holdings from $86 to $67 after Q4 results showed improving gross margins and strong bookings performance. The firm projects fiscal 2027 subscription revenue growth of 12.5%–13%, with Q4 revenue at $208.2M, ARR of $921M up 12%, and gross margin rising to 58.6%.
1. Analyst Rating and Price Target Change
RBC Capital maintained its Sector Perform rating on Q2 Holdings while lowering its price target from $86 to $67 following Q4 results that showed improving gross margins and strong bookings. The conservative fiscal 2027 subscription revenue outlook of 12.5%–13% weighed on investor sentiment despite positive underlying metrics.
2. Q4 Financial Performance Highlights
In the quarter ended December, the company reported revenue of $208.2 million, up 14% year-over-year, with subscription revenues growing 17% to represent 82% of total sales. ARR reached $921 million, up 12%, gross margin increased to 58.6%, and free cash flow totaled $173 million for the full year.