Q2 (QTWO) versus Qualys (QLYS) Head to Head Review

Q2 (NYSE:QTWO) and Qualys (NASDAQ:QLYS) are both mid-cap 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, risk, valuation, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

99.1% of Q2 shares are held by institutional investors. Comparatively, 85.3% of Qualys shares are held by institutional investors. 17.9% of Q2 shares are held by company insiders. Comparatively, 18.6% of Qualys shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Q2 -14.68% -12.18% -4.43%
Qualys 20.55% 14.35% 9.10%

Volatility & Risk

Q2 has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500. Comparatively, Qualys has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Valuation and Earnings

This table compares Q2 and Qualys’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Q2 $241.10 million 12.40 -$35.39 million ($0.37) -185.38
Qualys $278.89 million 11.37 $57.30 million $1.19 68.23

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

Analyst Recommendations

This is a breakdown of current ratings for Q2 and Qualys, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Q2 1 4 10 0 2.60
Qualys 1 8 7 0 2.38

Q2 presently has a consensus target price of $68.38, indicating a potential downside of 0.31%. Qualys has a consensus target price of $89.47, indicating a potential upside of 10.19%. Given Qualys’ higher probable upside, analysts plainly believe Qualys is more favorable than Q2.

Summary

Qualys beats Q2 on 10 of the 14 factors compared between the two stocks.

Q2 Company Profile

Q2 Holdings, Inc. provides cloud-based digital banking solutions to regional and community financial institutions (RCFIs) in the United States. It offers Q2 Digital Banking and Transactions, a browser-based digital banking solution that delivers RCFI-branded digital banking capabilities; Q2mobility App, a mobile and tablet digital banking solution; Q2mobile Remote Deposit Capture, a partnered solution that allows remote check deposit capture; and Q2 Person-to-Person Payments, a partnered secure and integrated person-to-person payments solution. The company also provides Q2 Corporate digital banking solutions designed to support commercial end users; Q2 Sentinel, a security analytics solution; Q2 Patrol, an event-driven validation product; Q2 SMART, a targeting and messaging platform; and Q2 CardSwap that allows account holders receiving newly issued cards to automatically change their payment information with existing subscription and digital point-of-sale services. In addition, it offers Q2 Gro, a digital account opening, and digital sales and marketing platform; Q2 Biller Direct, a bill payment solution; Centrix Dispute Tracking System, an electronic transaction dispute management solution; Centrix Payments I.Q. System, an ACH file monitoring and risk reporting solution; Centrix Exact/Transaction Management System, a fraud prevention tool; and Q2 Caliper Software Development Kit 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 2005 and is headquartered in Austin, Texas.

Qualys Company Profile

Qualys, Inc. provides cloud-based security and compliance solutions in the United States and internationally. The company offers Qualys Cloud Apps, which includes Asset Inventory, CMDB Sync, Vulnerability Management, Continuous Monitoring, Cloud Agent, Threat Protection, Security Configuration Assessment, Indication of Compromise, Policy Compliance, PCI Compliance, Security Assessment Questionnaire, File Integrity Monitoring, Web Application Scanning, and Web Application Firewall. Its integrated suite of security and compliance solutions delivered on its Qualys Cloud Platform enables customers to identify IT assets, collect and analyze IT security data, discover and prioritize vulnerabilities, recommend remediation actions, and verify the implementation of such actions. The company also provides core services, including asset tagging and management, reporting and dashboards, questionnaires and collaboration, remediation and workflow, big data correlation and analytics engine, and alerts and notifications, which enable integrated workflows, management and real-time analysis, and reporting across IT security and compliance solutions. The company markets and sells its IT security and compliance solutions to customers directly through its sales teams, as well as indirectly through its network of channel partners, such as security consulting organizations, managed service providers and resellers, and consulting firms. It serves enterprises, government entities, and small and medium-sized businesses in various industries, including education, financial services, government, healthcare, insurance, manufacturing, media, retail, technology, and utilities. The company was founded in 1999 and is headquartered in Foster City, California.

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