Comprehensive Stock Comparison
Compare Q2 Holdings, Inc. (QTWO) vs Guidewire Software, Inc. (GWRE) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | GWRE | 22.6% revenue growth vs QTWO's 14.1% |
| Value | QTWO | Lower P/E (16.5x vs 49.3x) |
| Quality / Margins | GWRE | 7.2% net margin vs QTWO's 4.1% |
| Stability / Safety | GWRE | Beta 0.88 vs QTWO's 1.30, lower leverage |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | GWRE | -27.8% vs QTWO's -44.9% |
| Efficiency (ROA) | GWRE | 3.5% ROA vs QTWO's 2.2%, ROIC 2.3% vs 4.5% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Q2 Holdings is a cloud-based digital banking platform provider for regional and community banks and credit unions in the United States. It generates revenue primarily through subscription fees for its software-as-a-service platform — which includes digital banking, lending, and account opening solutions — with additional income from professional services and transaction-based fees. The company's moat stems from its deep integration with core banking systems, regulatory compliance expertise, and the high switching costs for financial institutions once they adopt its comprehensive digital ecosystem.
Guidewire Software is a provider of core software systems for property and casualty insurers worldwide. It generates revenue primarily through software licenses, cloud subscriptions, and implementation services — with its InsuranceSuite platform being the main offering. The company's moat comes from deep industry-specific expertise, high switching costs for insurers, and a comprehensive product ecosystem that creates vendor lock-in.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
GWRE leads in 3 of 6 categories (Financial Metrics, Total Returns). QTWO leads in 2 (Valuation Metrics, Profitability & Efficiency).
Financial Metrics (TTM)
GWRE is the larger business by revenue, generating $1.3B annually — 1.7x QTWO's $770M. Profitability is closely matched — net margins range from 7.2% (GWRE) to 4.1% (QTWO). On growth, GWRE holds the edge at +26.5% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| RevenueTrailing 12 months | $770M | $1.3B |
| EBITDAEarnings before interest/tax | $73M | $89M |
| Net IncomeAfter-tax profit | $32M | $92M |
| Free Cash FlowCash after capex | $164M | $286M |
| Gross MarginGross profit ÷ Revenue | +53.4% | +63.1% |
| Operating MarginEBIT ÷ Revenue | +2.8% | +5.1% |
| Net MarginNet income ÷ Revenue | +4.1% | +7.2% |
| FCF MarginFCF ÷ Revenue | +21.3% | +22.5% |
| Rev. Growth (YoY)Latest quarter vs prior year | +15.2% | +26.5% |
| EPS Growth (YoY)Latest quarter vs prior year | +2.1% | +2.3% |
Valuation Metrics
At 60.1x trailing earnings, QTWO trades at a 66% valuation discount to GWRE's 179.4x P/E. On an enterprise value basis, QTWO's 74.9x EV/EBITDA is more attractive than GWRE's 189.7x.
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| Market CapShares × price | $3.0B | $12.3B |
| Enterprise ValueMkt cap + debt − cash | $3.0B | $12.3B |
| Trailing P/EPrice ÷ TTM EPS | 60.15x | 179.41x |
| Forward P/EPrice ÷ next-FY EPS est. | 16.49x | 49.27x |
| PEG RatioP/E ÷ EPS growth rate | — | — |
| EV / EBITDAEnterprise value multiple | 74.85x | 189.75x |
| Price / SalesMarket cap ÷ Revenue | 3.78x | 10.22x |
| Price / BookPrice ÷ Book value/share | 4.73x | 8.57x |
| Price / FCFMarket cap ÷ FCF | 15.45x | 41.62x |
Profitability & Efficiency
GWRE delivers a 6.0% return on equity — every $100 of shareholder capital generates $6 in annual profit, vs $5 for QTWO. GWRE carries lower financial leverage with a 0.49x debt-to-equity ratio, signaling a more conservative balance sheet compared to QTWO's 0.52x.
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| ROE (TTM)Return on equity | +5.1% | +6.0% |
| ROA (TTM)Return on assets | +2.2% | +3.5% |
| ROICReturn on invested capital | +4.5% | +2.3% |
| ROCEReturn on capital employed | +4.9% | +2.3% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 7 |
| Debt / EquityFinancial leverage | 0.52x | 0.49x |
| Net DebtTotal debt minus cash | -$22M | $17M |
| Cash & Equiv.Liquid assets | $368M | $699M |
| Total DebtShort + long-term debt | $346M | $716M |
| Interest CoverageEBIT ÷ Interest expense | 7.72x | 5.92x |
Total Returns (with DRIP)
A $10,000 investment in GWRE five years ago would be worth $12,565 today (with dividends reinvested), compared to $3,850 for QTWO. Over the past 12 months, GWRE leads with a -27.8% total return vs QTWO's -44.9%. The 3-year compound annual growth rate (CAGR) favors GWRE at 27.4% vs QTWO's 14.2% — a key indicator of consistent wealth creation.
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| YTD ReturnYear-to-date | -30.7% | -22.5% |
| 1-Year ReturnPast 12 months | -44.9% | -27.8% |
| 3-Year ReturnCumulative with dividends | +49.1% | +107.0% |
| 5-Year ReturnCumulative with dividends | -61.5% | +25.7% |
| 10-Year ReturnCumulative with dividends | +137.4% | +195.2% |
| CAGR (3Y)Annualised 3-year return | +14.2% | +27.4% |
Risk & Volatility
GWRE is the less volatile stock with a 0.88 beta — it tends to amplify market swings less than QTWO's 1.30 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. GWRE currently trades 53.3% from its 52-week high vs QTWO's 49.8% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.30x | 0.88x |
| 52-Week HighHighest price in past year | $96.68 | $272.60 |
| 52-Week LowLowest price in past year | $46.16 | $120.75 |
| % of 52W HighCurrent price vs 52-week peak | +49.8% | +53.3% |
| RSI (14)Momentum oscillator 0–100 | 25.1 | 52.5 |
| Avg Volume (50D)Average daily shares traded | 705K | 1.3M |
Analyst Outlook
Wall Street rates QTWO as "Buy" and GWRE as "Buy". Consensus price targets imply 74.4% upside for GWRE (target: $254) vs 58.8% for QTWO (target: $76).
| Metric | QTWOQ2 Holdings, Inc. | GWREGuidewire Softwar… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $76.40 | $253.50 |
| # AnalystsCovering analysts | 32 | 26 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | — | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | +0.2% | 0.0% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Q2 Holdings, Inc. (QTWO) | 100 | 77.62 | -22.4% |
| Guidewire Software,… (GWRE) | 100 | 124.1 | +24.1% |
Guidewire Software,… (GWRE) returned +26% over 5 years vs Q2 Holdings, Inc. (QTWO)'s -62%. A $10,000 investment in GWRE 5 years ago would be worth $12,565 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Q2 Holdings, Inc. (QTWO) | $150M | $795M | +429.1% |
| Guidewire Software,… (GWRE) | $424M | $1.2B | +183.3% |
Q2 Holdings, Inc.'s revenue grew from $150M (2016) to $795M (2025) — a 20.3% CAGR. Guidewire Software, Inc.'s revenue grew from $424M (2016) to $1.2B (2025) — a 12.3% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Q2 Holdings, Inc. (QTWO) | -24.2% | 6.5% | +127.0% |
| Guidewire Software,… (GWRE) | 3.5% | 5.8% | +64.5% |
Q2 Holdings, Inc.'s net margin went from -24% (2016) to 7% (2025). Guidewire Software, Inc.'s net margin went from 4% (2016) to 6% (2025).
Chart 4P/E Ratio History — 3 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Guidewire Software,… (GWRE) | 309.4 | 248.2 | -19.8% |
Guidewire Software, Inc. has traded in a 248x–439x P/E range over 3 years; current trailing P/E is ~179x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Q2 Holdings, Inc. (QTWO) | -0.92 | 0.8 | +187.0% |
| Guidewire Software,… (GWRE) | 0.2 | 0.81 | +305.0% |
Q2 Holdings, Inc.'s EPS grew from $-0.92 (2016) to $0.80 (2025). Guidewire Software, Inc.'s EPS grew from $0.20 (2016) to $0.81 (2025) — a 17% CAGR.
Chart 6Free Cash Flow — 5 Years
Q2 Holdings, Inc. generated $195M FCF in 2025 (+3457% vs 2021). Guidewire Software, Inc. generated $295M FCF in 2025 (+257% vs 2021).
QTWO vs GWRE: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is QTWO or GWRE a better buy right now?
Q2 Holdings, Inc. (QTWO) offers the better valuation at 60.1x trailing P/E (16.5x forward), making it the more compelling value choice. Analysts rate Q2 Holdings, Inc. (QTWO) a "Buy" — based on 32 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — QTWO or GWRE?
On trailing P/E, Q2 Holdings, Inc. (QTWO) is the cheapest at 60.1x versus Guidewire Software, Inc. at 179.4x. On forward P/E, Q2 Holdings, Inc. is actually cheaper at 16.5x.
03Which is the better long-term investment — QTWO or GWRE?
Over the past 5 years, Guidewire Software, Inc. (GWRE) delivered a total return of +25.7%, compared to -61.5% for Q2 Holdings, Inc. (QTWO). A $10,000 investment in GWRE five years ago would be worth approximately $13K today (assuming dividends reinvested). Over 10 years, the gap is even starker: GWRE returned +195.2% versus QTWO's +137.4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — QTWO or GWRE?
By beta (market sensitivity over 5 years), Guidewire Software, Inc. (GWRE) is the lower-risk stock at 0.88β versus Q2 Holdings, Inc.'s 1.30β — meaning QTWO is approximately 47% more volatile than GWRE relative to the S&P 500. On balance sheet safety, Guidewire Software, Inc. (GWRE) carries a lower debt/equity ratio of 49% versus 52% for Q2 Holdings, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — QTWO or GWRE?
Q2 Holdings, Inc. (QTWO) is the more profitable company, earning 6.5% net margin versus 5.8% for Guidewire Software, Inc. — meaning it keeps 6.5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: QTWO leads at 5.0% versus 3.4% for GWRE. At the gross margin level — before operating expenses — GWRE leads at 62.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is QTWO or GWRE more undervalued right now?
On forward earnings alone, Q2 Holdings, Inc. (QTWO) trades at 16.5x forward P/E versus 49.3x for Guidewire Software, Inc. — 32.8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for GWRE: 74.4% to $253.50.
07Which pays a better dividend — QTWO or GWRE?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
08Is QTWO or GWRE better for a retirement portfolio?
For long-horizon retirement investors, Guidewire Software, Inc. (GWRE) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.88), +195.2% 10Y return). Both have compounded well over 10 years (GWRE: +195.2%, QTWO: +137.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between QTWO and GWRE?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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