Analyzing SoundThinking (NASDAQ:SSTI) and Q2 (NYSE:QTWO)

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

Analyst Ratings

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

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

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	1.48	-$2.72 million	($0.12)	-102.42
Q2	$675.54 million	9.32	-$65.38 million	($0.96)	-108.61

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.

Risk & Volatility

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

Insider and Institutional Ownership

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

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%

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.