Q2 (NYSE:QTWO) and Trend Micro (OTCMKTS:TMICY) are both mid-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Analyst Ratings

This is a summary of current ratings and target prices for Q2 and Trend Micro, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Q2 0 5 12 0 2.71
Trend Micro 0 1 0 0 2.00

Q2 currently has a consensus target price of $103.60, suggesting a potential upside of 17.14%. Given Q2’s stronger consensus rating and higher probable upside, analysts clearly believe Q2 is more favorable than Trend Micro.

Valuation and Earnings

This table compares Q2 and Trend Micro’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Q2 $315.48 million 14.99 -$70.88 million ($0.44) -201.00
Trend Micro $1.52 billion 5.52 $257.09 million $1.84 32.34

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

Institutional & Insider Ownership

0.2% of Trend Micro shares are owned by institutional investors. 9.0% 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 will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Q2 -30.10% -5.59% -2.32%
Trend Micro 17.36% 16.36% 8.54%

Volatility & Risk

Q2 has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Trend Micro has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Summary

Trend Micro beats Q2 on 8 of the 14 factors compared between the two stocks.

About Q2

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.

About Trend Micro

Trend Micro Incorporated develops and sells security solutions primarily in Japan. The company offers hybrid cloud security solutions, such as data center, cloud, and virtualization security products; network security solutions, including integrated advanced threat prevention and advanced threat detection solutions; user protection solutions comprising endpoint and gateway suites, endpoint security, email security, Web security, SaaS application security, and endpoint detection and response; and support services. It serves finance, insurance, and retail industries, as well as government institutions. Trend Micro Incorporated has a partnership with Moxa Inc. to develop solutions to protect industrial Internet of Things environments; and strategic partnership with Luxoft Holding, Inc. to offer intrusion detection systems and intrusion prevention systems to detect, mitigate, and respond to cyber-attacks on connected cars. The company was founded in 1988 and is headquartered in Tokyo, Japan.

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