Q2 (NYSE:QTWO) versus Crexendo (NASDAQ:CXDO) Critical Survey

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Q2	0	4	9	0	2.69
Crexendo	0	1	3	0	2.75

Q2 currently has a consensus price target of $76.17, indicating a potential upside of 34.87%. Crexendo has a consensus price target of $10.50, indicating a potential upside of 77.36%. Given Crexendo’s stronger consensus rating and higher probable upside, analysts plainly believe Crexendo is more favorable than Q2.

Volatility & Risk

Q2 has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, Crexendo has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Valuation & Earnings

This table compares Q2 and Crexendo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Q2	$794.81 million	4.43	$52.01 million	$1.40	40.34
Crexendo	$80.91 million	2.43	$5.07 million	$0.14	42.29

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

Insider and Institutional Ownership

9.5% of Crexendo shares are owned by institutional investors. 0.9% of Q2 shares are owned by insiders. Comparatively, 47.2% of Crexendo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Q2 and Crexendo’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%
Crexendo	5.31%	14.34%	11.44%

Summary

Q2 beats Crexendo on 8 of the 14 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 Crexendo

Crexendo, Inc. provides cloud communication platform and services, video collaboration, and managed IT services for businesses in the United States and internationally. It operates through two segments, Cloud Telecommunications Services and Software Solutions. The Cloud Telecommunications segment provides telecommunications services that transmit calls using Internet protocol (IP) or cloud technology, which converts voice signals into digital data packets for transmission over the Internet or cloud; and broadband Internet services, as well as develops end user portals for account and license management, and billing and customer support. This segment is also involved in the sale and lease of cloud telecommunications equipment. In addition, it offers hardware, software, and unified communication solutions for businesses using IP or cloud technology over high-speed internet connection through various devices and user interfaces, such as desktop phones and/or mobile, and desktop applications under the Crexendo brand name. The Software Solutions segment provides a suite of unified communications, collaboration, video conferencing, and contact center solutions. This segment also offers SNAPsolution, an IP-based platform; SNAPaccel, a software-as-a-service based software; subscription maintenance and support services; and professional services, including consulting, technical support, resident engineer, design, and installation services. The company was formerly known as iMergent, Inc. and changed its name to Crexendo, Inc. in May 2011. Crexendo, Inc. was incorporated in 1995 and is based in Tempe, Arizona.