Here’s Why Q2 Holdings (QTWO) Landed in Artisan Partners’ Detractor List

Artisan Partners, a high value-added investment management firm, published its ‘Artisan Small Cap Fund’ third quarter 2021 investor letter – a copy of which can be downloaded here. A return of -1.20% was recorded by its Investor Class: ARTSX, -1.17% by its Advisor Class: APDSX, and -1.13% by its Institutional Class: APHSX for the third quarter of 2021, all above the Russell 2000® Growth Index that delivered a -5.65% return and the Russell 2000® Index that was down by -4.36% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Artisan Small Cap Fund, in its Q3 2021 investor letter, mentioned Q2 Holdings, Inc. (NYSE: QTWO) and discussed its stance on the firm. Q2 Holdings, Inc. is an Austin, Texas-based software company with a $4 billion market capitalization. QTWO delivered a -43.13% return since the beginning of the year, while its 12-month returns are down by -38.23%. The stock closed at $71.96 per share on December 03, 2021.

Here is what Artisan Small Cap Fund has to say about Q2 Holdings, Inc.  in its Q3 2021 investor letter:

“Among our bottom contributors was Q2 Holdings. Q2 Holdings is a leading provider of secure, cloud-based virtual banking solutions for smaller regional and community banks. Shares have been pressured alongside slowing in the company’s bookings backlog as it faces difficult year-over-year growth comparisons and recovers from an air pocket of bookings caused by delays in bank decision-making during the harshest of pandemic lockdowns. We expect these headwinds to abate over the near-to-intermediate term. We believe several areas of Q2’s business appear lowly penetrated— RCFI regional and community financial institutions—and given recent client wins, a reasonable valuation and an improving selling environment, we are remaining patient.”

Photo by Scott Graham on Unsplash

Based on our calculations, Q2 Holdings, Inc. (NYSE: QTWO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. QTWO was in 20 hedge fund portfolios at the end of the third quarter of 2021, compared to 19 funds in the previous quarter. Q2 Holdings, Inc. (NYSE: QTWO) delivered a -20.58% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.