Financial Contrast: D-Wave Quantum (NYSE:QBTS) versus Guidewire Software (NYSE:GWRE)

D-Wave Quantum (NYSE:QBTS) and Guidewire Software (NYSE:GWRE) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Profitability

This table compares D-Wave Quantum and Guidewire Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
D-Wave Quantum	-1,444.10%	-58.58%	-48.13%
Guidewire Software	14.11%	13.44%	7.48%

Volatility and Risk

D-Wave Quantum has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500. Comparatively, Guidewire Software has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Earnings & Valuation

This table compares D-Wave Quantum and Guidewire Software”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
D-Wave Quantum	$24.59 million	264.11	-$355.06 million	($1.10)	-15.96
Guidewire Software	$1.20 billion	11.30	$69.80 million	$2.20	72.98

Guidewire Software has higher revenue and earnings than D-Wave Quantum. D-Wave Quantum is trading at a lower price-to-earnings ratio than Guidewire Software, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for D-Wave Quantum and Guidewire Software, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
D-Wave Quantum	2	0	14	0	2.75
Guidewire Software	1	4	11	0	2.63

D-Wave Quantum presently has a consensus price target of $36.50, suggesting a potential upside of 107.85%. Guidewire Software has a consensus price target of $249.85, suggesting a potential upside of 55.61%. Given D-Wave Quantum’s stronger consensus rating and higher possible upside, research analysts plainly believe D-Wave Quantum is more favorable than Guidewire Software.

Institutional & Insider Ownership

42.5% of D-Wave Quantum shares are held by institutional investors. 3.2% of D-Wave Quantum shares are held by insiders. Comparatively, 0.5% of Guidewire Software shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

About D-Wave Quantum

D-Wave Quantum Inc. develops and delivers quantum computing systems, software, and services worldwide. The company offers Advantage, a fifth-generation quantum computer; Ocean, a suite of open-source python tools; and Leap, a cloud-based service that provides real-time access to a live quantum computer, as well as access to Advantage, hybrid solvers, the Ocean software development kit, live code, demos, learning resources, and a vibrant developer community. It also provides D-Wave Launch, a quantum professional service that guides enterprises from problem discovery through production implementation. The company's quantum solutions are used in logistics, financial services, drug discovery, materials sciences, scheduling, fault detection, mobility, and supply chain management. It serves financial services, manufacturing/logistics, mobility, and life sciences/pharmaceuticals industries. D-Wave Quantum Inc. was founded in 1999 and is headquartered in Burnaby, Canada.

About Guidewire Software

Guidewire Software, Inc. provides a platform for property and casualty (P&C) insurers worldwide. The company offers Guidewire InsuranceSuite Cloud, such as PolicyCenter Cloud, BillingCenter Cloud, and ClaimCenter Cloud applications. It also provides Guidewire InsuranceNow, a cloud-based platform that offers policy, billing, and claims management functionality to insurers; and Guidewire InsuranceSuite for Self-Managed. In addition, the company offers Guidewire Rating Management to manage the pricing of insurance products; and Guidewire Reinsurance Management to use rules-based logic to execute reinsurance strategy through underwriting and claims processes. Further, it provides Guidewire Underwriting Management, a cloud-based integrated business application; Guidewire AppReader, a submission intake management solution; Guidewire ClaimCenter Package for the London market supports the claims workflow used by London Market insurers and brokers; Guidewire Digital Engagement Applications, which enable insurers to provide digital experiences to customers, agents, vendors, and field personnel through their device of choice; and Guidewire for Salesforce to provide customer information regarding policies and claims. Additionally, the company offers Guidewire Predict, a P&C-specific machine-learning platform; Guidewire HazardHub that allows insurers to understand, assess, price, and manage property risk; Guidewire Canvas, Guidewire Compare, and Guidewire Explore cloud-native applications; and Guidewire Cyence, a cyber-risk economic modeling product. The company was incorporated in 2001 and is headquartered in San Mateo, California.