Head-To-Head Analysis: Altair Engineering (ALTR) & Q2 (QTWO)

Altair Engineering (NASDAQ:ALTR) and Q2 (NYSE:QTWO) are both mid-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Earnings & Valuation

This table compares Altair Engineering and Q2’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altair Engineering $333.33 million 6.82 -$99.40 million ($0.63) -51.29
Q2 $193.98 million 12.14 -$26.16 million ($0.48) -113.10

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

Insider & Institutional Ownership

38.4% of Altair Engineering shares are held by institutional investors. Comparatively, 93.4% of Q2 shares are held by institutional investors. 38.2% of Altair Engineering shares are held by company insiders. Comparatively, 17.9% of Q2 shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Altair Engineering and Q2, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altair Engineering 0 3 4 0 2.57
Q2 0 8 6 0 2.43

Altair Engineering currently has a consensus price target of $39.33, suggesting a potential upside of 21.74%. Q2 has a consensus price target of $62.38, suggesting a potential upside of 14.91%. Given Altair Engineering’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Altair Engineering is more favorable than Q2.

Profitability

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

Net Margins Return on Equity Return on Assets
Altair Engineering -12.83% 13.76% 5.04%
Q2 -12.88% -12.61% -4.91%

Summary

Altair Engineering beats Q2 on 8 of the 13 factors compared between the two stocks.

About Altair Engineering

Altair Engineering Inc., together with its subsidiaries, provides enterprise-class engineering software worldwide. The company operates through two segments, Software and Client Engineering Services. Its integrated suite of multi-disciplinary computer aided engineering software optimizes design performance across various disciplines, including structures, motion, fluids, thermal management, electromagnetics, system modeling and embedded systems, as well as provides data analytics and true-to-life visualization and rendering. The company also offers client engineering services to support customers with long-term ongoing product design and development services, as well as consulting, training, and support services. Altair Engineering Inc. was founded in 1985 and is headquartered in Troy, Michigan.

About Q2

Q2 Holdings, Inc. provides cloud-based digital banking solutions to regional and community financial institutions (RCFIs) in the United States. It offers Q2online, a browser-based digital banking solution that delivers RCFI-branded digital banking capabilities; Q2 Sentinel, a security analytics solution; Q2 Corporate to support RCFIs to attract and retain larger commercial accounts; and Q2 SMART, a targeting and messaging platform. The company also provides Q2 Account Opening solution; Q2 Active/Active that operates various data centers; and Q2 Patrol, an event-driven validation product. In addition, it offers Q2mobility App, a mobile and tablet digital banking solution; Q2mobile Remote Deposit Capture, a partnered solution that allows remote check deposit capture; Q2 Person-to-Person Payments, a partnered secure and integrated person-to-person payments solution; Detection Monitoring Service, a security threat tracking solution; 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. Further, the company provides Q2text, a mobile solution, which enables digital banking activities through the text messaging function of the device; Q2voice, a voice-based solution for telephones; and Q2themes, a personalization solution for customizing digital banking services. Additionally, it offers Q2clarity, an analytics solution for Q2online customers; Centrix Dispute Tracking System, an electronic transaction dispute management solution; Centrix Payments I.Q. System, an ACH file monitoring and risk reporting solution; and Centrix Exact/Transaction Management System, a fraud prevention tool. 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.

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