Red Hat (NYSE: RHT) and Atlassian (NASDAQ:TEAM) are both large-cap technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.


This table compares Red Hat and Atlassian’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red Hat 12.14% 26.23% 7.66%
Atlassian -15.85% -4.00% -2.74%

Institutional & Insider Ownership

94.6% of Red Hat shares are held by institutional investors. Comparatively, 87.7% of Atlassian shares are held by institutional investors. 0.7% of Red Hat shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Red Hat and Atlassian, as provided by

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red Hat 1 8 23 0 2.69
Atlassian 0 4 9 0 2.69

Red Hat presently has a consensus target price of $126.20, suggesting a potential downside of 18.83%. Atlassian has a consensus target price of $55.89, suggesting a potential downside of 8.77%. Given Atlassian’s stronger consensus rating and higher probable upside, analysts clearly believe Atlassian is more favorable than Red Hat.

Earnings and Valuation

This table compares Red Hat and Atlassian’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red Hat $2.41 billion 11.41 $253.70 million $1.84 84.50
Atlassian $619.94 million 9.84 -$42.50 million ($0.31) -197.61

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


Red Hat beats Atlassian on 11 of the 13 factors compared between the two stocks.

About Red Hat

Red Hat, Inc. (Red Hat) provides open source software solutions, using a community-powered approach to develop and offer operating system, virtualization, management, middleware, cloud, mobile and storage technologies. Red Hat operates through three geographical segments: the Americas, including the United States, Canada and Latin America; EMEA, including Europe, Middle East and Africa, and Asia Pacific. Its products and services include infrastructure-related offerings, application development-related and other technology offerings, and consulting, support and training services. Its infrastructure-related offerings include Red Hat Enterprise Linux, Red Hat Satellite and Red Hat Enterprise Virtualization. Its application development-related and other technology offerings include Red Hat JBoss Middleware, Red Hat cloud offerings, Red Hat Mobile and Red Hat Storage. Its consulting services include upgrade planning, platform migrations, solution integration and application development.

About Atlassian

Atlassian Corporation Plc is a holding company. The Company offers a range of team collaboration products. The Company offers products, including JIRA, Confluence, HipChat, Bitbucket and JIRA Service Desk, for software developers, information technology (IT) managers and knowledge workers. The Company offers JIRA for team planning and project management; Confluence for team content creation and sharing; HipChat for team real-time messaging and communications; Bitbucket for team code sharing and management, and JIRA Service Desk for team service and support applications. JIRA allows teams to organize their work into projects and customize dashboards for those projects to keep their teams aligned and on track. Confluence provides a system for organizing, sharing and securing content in spaces arranged by team, project, department and others. The Company also offers additional tools for software developers, such as FishEye, Clover, Crowd, Crucible, Bamboo and SourceTree.

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