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

Valuation and Earnings

This table compares RealNetworks and Atlassian’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RealNetworks $120.47 million 1.33 -$36.55 million ($0.73) -5.90
Atlassian $619.94 million 7.33 -$42.50 million ($0.24) -194.12

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

Insider and Institutional Ownership

51.9% of RealNetworks shares are held by institutional investors. Comparatively, 81.0% of Atlassian shares are held by institutional investors. 37.9% of RealNetworks shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
RealNetworks -21.67% -32.64% -21.89%
Atlassian -7.96% -2.11% -1.48%

Analyst Ratings

This is a breakdown of recent recommendations for RealNetworks and Atlassian, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RealNetworks 0 0 1 0 3.00
Atlassian 0 4 9 0 2.69

RealNetworks currently has a consensus target price of $6.50, suggesting a potential upside of 50.81%. Atlassian has a consensus target price of $48.44, suggesting a potential upside of 3.98%. Given RealNetworks’ stronger consensus rating and higher possible upside, equities analysts plainly believe RealNetworks is more favorable than Atlassian.

Risk & Volatility

RealNetworks has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Atlassian has a beta of 2.8, meaning that its stock price is 180% more volatile than the S&P 500.

Summary

Atlassian beats RealNetworks on 9 of the 13 factors compared between the two stocks.

RealNetworks Company Profile

RealNetworks, Inc. creates applications and services that enable to connect with digital media. The Company connects consumers with their digital media directly and through partners, focusing on supporting various network, devices, media types and social networks. It operates through three segments: Consumer Media, Mobile Services and Games. Within its Consumer Media business, its RealPlayer media player software includes features and services that enable consumers to discover, play, download, manage and edit digital video, stream audio and video, download and save photos and videos from the Web, transfer and share content on social networks, and edit their own photo and video content. The Mobile Services segment consists of digital media services it provides to mobile and online service providers as software as a service offerings. It develops, publishes, licenses and distributes casual games.

Atlassian Company Profile

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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