Financial Review: Atlassian (NASDAQ:TEAM) versus InterDigital (NASDAQ:IDCC)

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

Valuation and Earnings

This table compares InterDigital and Atlassian”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
InterDigital	$834.02 million	10.13	$406.64 million	$8.67	37.75
Atlassian	$6.57 billion	8.79	-$53.83 million	($0.19)	-1,197.95

InterDigital has higher earnings, but lower revenue 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.

Risk and Volatility

InterDigital has a beta of 1.43, indicating that its share price is 43% more volatile than the S&P 500. Comparatively, Atlassian has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Institutional and Insider Ownership

99.8% of InterDigital shares are owned by institutional investors. Comparatively, 94.4% of Atlassian shares are owned by institutional investors. 3.5% of InterDigital shares are owned by insiders. Comparatively, 37.6% of Atlassian shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
InterDigital	38.32%	28.17%	15.00%
Atlassian	-0.82%	20.99%	4.36%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
InterDigital	0	1	3	0	2.75
Atlassian	1	4	24	0	2.79

InterDigital currently has a consensus price target of $450.00, indicating a potential upside of 37.50%. Atlassian has a consensus price target of $213.35, indicating a potential downside of 6.27%. Given InterDigital’s higher possible upside, equities analysts clearly believe InterDigital is more favorable than Atlassian.

Summary

InterDigital beats Atlassian on 10 of the 14 factors compared between the two stocks.

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.

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.