Datawatch (NASDAQ: DWCH) and Q2 (NYSE:QTWO) are both small-cap computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, risk, institutional ownership, valuation and profitability.

Valuation and Earnings

This table compares Datawatch and Q2’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Datawatch $36.26 million 3.29 -$3.99 million ($0.22) -43.86
Q2 $193.98 million 9.67 -$26.16 million ($0.64) -69.77

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

Volatility and Risk

Datawatch has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Q2 has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Datawatch and Q2, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Datawatch 0 1 2 0 2.67
Q2 0 5 7 0 2.58

Datawatch presently has a consensus target price of $14.00, indicating a potential upside of 45.08%. Q2 has a consensus target price of $47.00, indicating a potential upside of 5.26%. Given Datawatch’s stronger consensus rating and higher possible upside, equities analysts clearly believe Datawatch is more favorable than Q2.

Institutional and Insider Ownership

41.7% of Datawatch shares are owned by institutional investors. Comparatively, 89.9% of Q2 shares are owned by institutional investors. 9.4% of Datawatch shares are owned by insiders. Comparatively, 24.5% of Q2 shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.


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

Net Margins Return on Equity Return on Assets
Datawatch -6.89% -3.81% -2.56%
Q2 -13.49% -19.61% -10.07%


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

Datawatch Company Profile

Datawatch Corporation is engaged in the design, development, marketing, distribution and support of business computer software primarily for the self-service data preparation and visual data discovery markets. The Company also provides services, including implementation and support of its software products, as well as training on their use and administration. The Company’s product family includes Datawatch Monarch, Datawatch Panopticon and Datawatch Report Mining Server (RMS). The Company offers its enterprise products through perpetual licenses and subscription pricing models. The Company also offers educational services for customers and partners implementing and learning about the platform, maintenance and support, and professional services to provide in-depth technical assistance for software implementations. The Company offers an array of live and virtual classroom instruction, including private onsite classes.

Q2 Company Profile

Q2 Holdings, Inc. is a provider of cloud-based digital banking solutions. The Company enables regional and community financial institutions (RCFIs), to deliver a suite of integrated digital banking services. The Company’s solutions all operate on a common platform that supports the delivery of unified digital banking services across online, mobile and voice channels. Its platform provides a single point of management enabling RCFIs to deliver targeted experiences, including tailored rights, features and branding to account holders. Its cloud-based solutions and common platform provide its RCFI customers with a view of account holder access and activity across devices and channels. Its solutions include Q2online, Q2 Risk & Fraud Analytics, Q2 Corporate, Q2 SMART, Q2mobility Application, Q2mobile Remote Deposit Capture, Q2text, Q2themes, Q2clarity, Centrix Dispute Tracking System (DTS), Centrix Payments I.Q. System (PIQS), and Centrix Exact/Transaction Management System (Exact/TMS).

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