Head-To-Head Analysis: Q2 (NYSE:QTWO) versus SoundThinking (NASDAQ:SSTI)

Q2 (NYSE:QTWO) and SoundThinking (NASDAQ:SSTI) are both computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, risk, profitability and valuation.

Volatility & Risk

Q2 has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, SoundThinking has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Institutional & Insider Ownership

60.7% of SoundThinking shares are owned by institutional investors. 3.0% of Q2 shares are owned by company insiders. Comparatively, 9.2% of SoundThinking shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Q2 and SoundThinking’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Q2	-8.40%	-2.30%	-0.88%
SoundThinking	-1.39%	-8.74%	-4.57%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Q2 and SoundThinking, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q2	0	5	10	0	2.67
SoundThinking	0	2	3	1	2.83

Q2 currently has a consensus target price of $95.80, indicating a potential downside of 8.12%. SoundThinking has a consensus target price of $21.20, indicating a potential upside of 72.50%. Given SoundThinking’s stronger consensus rating and higher possible upside, analysts clearly believe SoundThinking is more favorable than Q2.

Earnings and Valuation

This table compares Q2 and SoundThinking”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q2	$675.54 million	9.32	-$65.38 million	($0.96)	-108.61
SoundThinking	$104.67 million	1.48	-$2.72 million	($0.12)	-102.42

SoundThinking has lower revenue, but higher earnings than Q2. Q2 is trading at a lower price-to-earnings ratio than SoundThinking, indicating that it is currently the more affordable of the two stocks.

Summary

SoundThinking beats Q2 on 9 of the 15 factors compared between the two stocks.

About Q2

Q2 Holdings, Inc. provides cloud-based digital solutions to regional and community financial institutions in the United States. The company offers Digital Banking Platform, an end-to-end digital banking platform supports its financial institution customers in their delivery of unified digital banking services across digital channels. Its digital banking platform solutions, comprising Q2 Consumer Banking, Q2 Small Business and Commercial, Q2mobile Remote Deposit Capture, Q2 Sentinel, Q2 Patrol, Q2 SMART, Q2 Contextual Personal Financial Management, Q2 Goals, Q2 CardSwap, Q2 Gro, Q2 Innovation Studio, Q2 Biller Direct, ClickSWITCH, Sensibill, Centrix Dispute Tracking System, Centrix Payments I.Q. System, and Centrix Exact/Transaction Management System. The company also provides lending solutions, which consists precisionlender solutions, a cloud-based platform, data-driven sales enablement, relationship pricing, and portfolio management solution includes precisionlender platform, premium treasury pricing, data studio, and Andi; and Q2 Cloud Lending solutions, a cloud-based digital lending platform and end-to-end lending solution that allows financial institutions, FinTechs, and Alt-FIs to automate and digitize their lending activities, supporting digital lending applications, scoring, underwriting, servicing, and collections for multiple assets classes comprising Q2 CL portal, originate, loan, marketplace, and collections. In addition, it offers Q2 Innovation Studio, an application program interface, or API, based and software development kit, or SDK, based open technology platform; and Helix, a cloud-native, real-time core processing platform. The company was formerly known as CBG Holdings, Inc. and changed its name to Q2 Holdings, Inc. in March 2013. Q2 Holdings, Inc. was founded in 2004 and is headquartered in Austin, Texas.

About SoundThinking

SoundThinking, Inc., a public safety technology company that provides transformative solutions and strategic advisory services for law enforcement and civic leadership. Its SafetySmart Platform, an integrated suite of data-driven tools that enable law enforcement and community violence prevention and health organizations to be efficient in public safety outcomes. It offers ShotSpotter, an acoustic gunshot detection system; CrimeTracer, a law enforcement search engine; CaseBuilder, an investigation management system; and ResourceRouter, a software that directs patrol and community anti-violence resources to help maximize their impact. The company sells its solutions through its direct sales teams. The company was formerly known as ShotSpotter, Inc. and changed its name to SoundThinking, Inc. in April 2023. SoundThinking, Inc. was founded in 1996 and is headquartered in Fremont, California.