Financial Analysis: Q2 (NYSE:QTWO) versus CoreWeave (NASDAQ:CRWV)

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

Analyst Recommendations

This is a breakdown of current ratings for Q2 and CoreWeave, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q2	0	3	7	0	2.70
CoreWeave	2	12	19	0	2.52

Q2 presently has a consensus target price of $75.27, indicating a potential upside of 67.34%. CoreWeave has a consensus target price of $129.63, indicating a potential upside of 24.32%. Given Q2’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Q2 is more favorable than CoreWeave.

Volatility and Risk

Q2 has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, CoreWeave has a beta of 7.84, indicating that its stock price is 684% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q2	$794.81 million	3.54	$52.01 million	$1.12	40.16
CoreWeave	$5.13 billion	9.10	-$1.17 billion	($3.11)	-33.53

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Q2	8.99%	14.68%	6.83%
CoreWeave	-25.57%	-43.07%	-3.84%

Summary

Q2 beats CoreWeave on 8 of the 12 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 CoreWeave

CoreWeave, Inc. engages in the powers of the creation and delivery of the intelligence that drives innovation. It offers a solution used by organizations of all sizes that require sophisticated AI computing, from the largest of enterprises to small, well-funded start-ups. The company was founded by Michael Intrator, Brian Venturo, and Brannin McBee on September 21, 2017 and is headquartered in Livingston, NJ.