Financial Analysis: Atlassian (NASDAQ:TEAM) vs. AppFolio (NASDAQ:APPF)

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Atlassian and AppFolio, as provided by MarketBeat.

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

Atlassian currently has a consensus price target of $209.48, suggesting a potential upside of 38.33%. AppFolio has a consensus price target of $250.00, suggesting a potential upside of 10.86%. Given Atlassian’s stronger consensus rating and higher possible upside, equities analysts plainly believe Atlassian is more favorable than AppFolio.

Risk and Volatility

Atlassian has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Institutional and Insider Ownership

94.5% of Atlassian shares are owned by institutional investors. Comparatively, 85.2% of AppFolio shares are owned by institutional investors. 37.6% of Atlassian shares are owned by company insiders. Comparatively, 1.6% of AppFolio shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

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

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

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlassian	$6.57 billion	5.83	-$53.83 million	$0.36	420.64
AppFolio	$950.82 million	8.41	$140.92 million	$4.74	47.57

AppFolio has lower revenue, but higher earnings 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.

Summary

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

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.

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.