Contrasting Braze (NASDAQ:BRZE) and Q2 (NYSE:QTWO)

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

Risk and Volatility

Q2 has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Braze has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Q2	10.87%	17.04%	8.80%
Braze	-13.55%	-16.11%	-8.86%

Institutional & Insider Ownership

90.5% of Braze shares are held by institutional investors. 0.9% of Q2 shares are held by company insiders. Comparatively, 12.5% of Braze shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Q2 and Braze”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q2	$846.20 million	5.10	$52.01 million	$1.40	49.47
Braze	$738.18 million	7.06	-$131.29 million	($1.03)	-44.54

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Q2 and Braze, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q2	0	4	9	1	2.79
Braze	1	17	5	0	2.17

Q2 currently has a consensus price target of $74.83, suggesting a potential upside of 8.05%. Braze has a consensus price target of $43.95, suggesting a potential downside of 4.21%. Given Q2’s stronger consensus rating and higher possible upside, research analysts plainly believe Q2 is more favorable than Braze.

Summary

Q2 beats Braze on 12 of the 15 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 Braze

Braze, Inc. operates a customer engagement platform that provides interactions between consumers and brands worldwide. The company offers Braze software development kits that automatically manage data ingestion and deliver mobile and web notifications, in-application/in-browser interstitial messages, and content cards; REST API that can be used to import or export data or to trigger workflows between Braze and brands' existing technology stacks; Partner Data Integrations, which allow brands to sync user cohorts from partners; Data Transformation, in which brands can programmatically sync and transform user data; and Braze Cloud Data Ingestion that enables brands to harness their customer data. It also offers classification products, including segmentation that can define reusable segments of consumers based upon attributes, events, or predictive propensity scores; segment insights, which allows customers to analyze how segments are performing relative to each other across a set of pre-selected key performance indicators; and predictive suite that allows customers to identify groups of consumers that are of critical business value. In addition, the company provides Canvas, an orchestration tool that allows customers to create journeys, mapping out multi-steps, and cross-channel messaging experiences; campaigns, which allows customers to send one set of single-channel or multi-channel messages to be delivered to customers in a particular user segment; event and API triggering; marketing pressure management; and reporting and analytics. Further, it offers personalization products, such as liquid templating platform, connected content platform, content blocks, intelligent timing and channel, personalized variant, and AI item recommendations, and catalogs; and action products. The company was formerly known as Appboy, Inc. and changed its name to Braze, Inc. in November 2017. Braze, Inc. was incorporated in 2011 and is headquartered in New York, New York.