Q2 (NYSE:QTWO) & SoundThinking (NASDAQ:SSTI) Critical Contrast

SoundThinking (NASDAQ:SSTI) and Q2 (NYSE:QTWO) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Valuation & Earnings

This table compares SoundThinking and Q2″s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SoundThinking	$104.67 million	1.56	-$2.72 million	($0.12)	-108.00
Q2	$675.54 million	9.45	-$65.38 million	($0.96)	-110.08

SoundThinking has higher earnings, but lower revenue 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.

Volatility and Risk

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

Profitability

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

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

Insider & Institutional Ownership

60.7% of SoundThinking shares are owned by institutional investors. 9.2% of SoundThinking shares are owned by company insiders. Comparatively, 3.0% of Q2 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for SoundThinking and Q2, as provided by MarketBeat.

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

SoundThinking currently has a consensus price target of $21.20, suggesting a potential upside of 63.58%. Q2 has a consensus price target of $95.80, suggesting a potential downside of 9.35%. Given SoundThinking’s stronger consensus rating and higher possible upside, equities research analysts clearly believe SoundThinking is more favorable than Q2.

Summary

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

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.

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.