Head-To-Head Analysis: Atlassian (NASDAQ:TEAM) and AppFolio (NASDAQ:APPF)

AppFolio (NASDAQ:APPF) and Atlassian (NASDAQ:TEAM) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Insider and Institutional Ownership

85.2% of AppFolio shares are held by institutional investors. Comparatively, 94.4% of Atlassian shares are held by institutional investors. 1.6% of AppFolio shares are held by insiders. Comparatively, 37.6% of Atlassian shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares AppFolio and Atlassian”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AppFolio	$1.09 billion	7.33	$140.92 million	$4.74	47.42
Atlassian	$6.91 billion	5.44	-$53.83 million	$0.36	412.78

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AppFolio	15.62%	33.56%	27.03%
Atlassian	1.28%	33.53%	6.35%

Analyst Recommendations

This is a summary of current recommendations for AppFolio and Atlassian, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AppFolio	0	3	9	0	2.75
Atlassian	1	3	24	0	2.82

AppFolio presently has a consensus price target of $250.00, indicating a potential upside of 11.23%. Atlassian has a consensus price target of $209.48, indicating a potential upside of 40.97%. Given Atlassian’s stronger consensus rating and higher possible upside, analysts clearly believe Atlassian is more favorable than AppFolio.

Risk & Volatility

AppFolio has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, Atlassian has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Summary

Atlassian beats AppFolio on 8 of the 14 factors compared between the two stocks.

About AppFolio

AppFolio, Inc. provides cloud-based software for the real estate industry. Its products help property managers handle day-to-day operations, including accounting, leasing, marketing, maintenance, and communication with residents and owners. The company also offers software for real estate investment managers, supporting investor relations and investment operations. Its offerings include the AppFolio Property Manager platform, with solutions designed for businesses of different sizes and operating needs.

About Atlassian

Atlassian Corporation develops collaboration and productivity software for software, IT and business teams. Its products help organizations plan and track work, manage software development and support services, and share information across teams. Its product portfolio includes Jira for project and issue tracking, Confluence for team documentation and collaboration, Jira Service Management for IT and other service teams, Trello for visual work management, and Bitbucket for code collaboration. Atlassian also offers cloud-based products and tools for distributed teams.