Atlassian (NASDAQ:TEAM – Get Free Report) and InterDigital (NASDAQ:IDCC – Get Free Report) are both technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Profitability
This table compares Atlassian and InterDigital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Atlassian | -0.82% | 20.99% | 4.36% |
| InterDigital | 38.32% | 28.17% | 15.00% |
Earnings and Valuation
This table compares Atlassian and InterDigital”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Atlassian | $6.57 billion | 8.29 | -$53.83 million | ($0.19) | -1,130.26 |
| InterDigital | $788.50 million | 10.55 | $406.64 million | $8.67 | 37.19 |
InterDigital has lower revenue, but higher earnings than Atlassian. Atlassian is trading at a lower price-to-earnings ratio than InterDigital, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Atlassian and InterDigital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Atlassian | 1 | 4 | 25 | 0 | 2.80 |
| InterDigital | 0 | 0 | 3 | 1 | 3.25 |
Atlassian currently has a consensus price target of $207.30, suggesting a potential downside of 3.47%. InterDigital has a consensus price target of $450.00, suggesting a potential upside of 39.58%. Given InterDigital’s stronger consensus rating and higher possible upside, analysts plainly believe InterDigital is more favorable than Atlassian.
Insider & Institutional Ownership
94.5% of Atlassian shares are held by institutional investors. Comparatively, 99.8% of InterDigital shares are held by institutional investors. 37.6% of Atlassian shares are held by insiders. Comparatively, 3.5% of InterDigital 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.
Volatility and Risk
Atlassian has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, InterDigital has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500.
Summary
InterDigital beats Atlassian on 12 of the 15 factors compared between the two stocks.
About Atlassian
Atlassian Corporation, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide. Its product portfolio includes Jira Software and Jira Work Management, a project management system that connects technical and business teams so they can better plan, organize, track and manage their work and projects; Confluence, a connected workspace that organizes knowledge across all teams to move work forward; and Trello, a collaboration and organization product that captures and adds structure to fluid and fast-forming work for teams. The company also offers Jira Service Management, an intuitive and flexible service desk product for creating and managing service experiences for various service team providers, such as IT, legal, and HR teams; and Jira Align, an Atlassian's enterprise agility solution designed to help businesses to adapt and respond dynamic business conditions with a focus on value-creation. In addition, it provides Bitbucket, an enterprise-ready Git solution that enables professional dev teams to manage, collaborate, and deploy quality code; Atlassian Access, an enterprise-wide product for enhanced security and centralized administration that works across every Atlassian cloud product; and Jira Product, a prioritization and road mapping tool. Further, the company's portfolio includes Atlas, a teamwork directory; Bamboo, a continuous delivery pipeline; Crowd, a single sign-on; Crucible, a collaborative code review; Fisheye, a search, track, and visualize code change software; and Compass, a developer experience platform. Additionally, it offers Opsgenie, an on-call and alert management software; Sourcetree, a free git client for windows and mac; Statuspage that communicates real-time status to users; Beacon, an intelligent threat detection software; and Atlassian Access that enhance data security and governance for Atlassian Cloud products. The company was founded in 2002 and is headquartered in Sydney, Australia.
About InterDigital
InterDigital, Inc. operates as a global research and development company with focus primarily on wireless, visual, artificial intelligence (AI), and related technologies. The company engages in the design and development of technologies that enable connected in a range of communications and entertainment products and services, which are licensed to companies providing such products and services, including makers of wireless communications, consumer electronics, IoT devices, and cars and other motor vehicles, as well as providers of cloud-based services, such as video streaming. It designs and develops a range of innovations for use in digital cellular and wireless products and networks, including 2G, 3G, 4G, 5G, and IEEE 802-related products and networks. The company also develops cellular technologies, such as technologies related to CDMA, TDMA, OFDM/OFDMA, and MIMO for use in 2G, 3G, 4G, and 5G wireless networks, as well as mobile terminal devices; and 3GPP technology portfolio in 5G, 5G, advanced and 6G, as well as technologies for automobiles, wearables, smart homes, drones, and other connected consumer electronic products. In addition, it provides video coding and transmission technologies; and engages in the research and development of artificial intelligence and machine learning solutions. Further, the company's patented technologies are used in various products that include smartphones, tablets, consumer electronics, and base stations; televisions, laptops, gaming consoles, set-top boxes, streaming devices, and connected automobiles. InterDigital, Inc. was incorporated in 1972 and is headquartered in Wilmington, Delaware.
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