AppFolio (NASDAQ: APPF) and Mitel Networks (NASDAQ:MITL) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Ratings

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This is a breakdown of current ratings and recommmendations for AppFolio and Mitel Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AppFolio 0 4 1 0 2.20
Mitel Networks 0 1 3 0 2.75

AppFolio currently has a consensus target price of $40.50, indicating a potential downside of 6.68%. Mitel Networks has a consensus target price of $12.17, indicating a potential upside of 33.85%. Given Mitel Networks’ stronger consensus rating and higher possible upside, analysts clearly believe Mitel Networks is more favorable than AppFolio.

Earnings & Valuation

This table compares AppFolio and Mitel Networks’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AppFolio $105.59 million 13.95 -$8.28 million $0.16 271.27
Mitel Networks $987.60 million 1.10 -$217.30 million ($2.06) -4.41

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

Profitability

This table compares AppFolio and Mitel Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AppFolio 4.37% 7.91% 5.99%
Mitel Networks -26.71% -9.36% -2.42%

Institutional and Insider Ownership

24.7% of AppFolio shares are held by institutional investors. Comparatively, 80.9% of Mitel Networks shares are held by institutional investors. 44.8% of AppFolio shares are held by company insiders. Comparatively, 16.5% of Mitel Networks shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

AppFolio has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Mitel Networks has a beta of 2.67, meaning that its share price is 167% more volatile than the S&P 500.

Summary

AppFolio beats Mitel Networks on 7 of the 13 factors compared between the two stocks.

AppFolio Company Profile

AppFolio, Inc. is a provider of industry-specific, cloud-based software solutions for small and medium-sized businesses (SMBs) in the property management and legal industries. The Company’s mobile-optimized software solutions enable its customers to work at any time and from anywhere across multiple devices. Its property management software provides small and medium-sized property managers with an end-to-end solution to their business needs. The Company’s legal software provides solo practitioners and small law firms with a streamlined practice and case management solution, allowing them to manage their practices and case load. It also offers Value+ services, such as its professionally designed Websites and electronic payment services. The Company’s property manager customers include third-party managers and owner-operators, managing single- and multi-family residences, commercial property and student housing, as well as mixed real estate portfolios.

Mitel Networks Company Profile

Mitel Networks Corporation is a provider of business communications and collaboration software, services and solutions. The Company’s segments include Cloud and Enterprise. The Enterprise segment sells and supports products and services for premise-based customers. The Cloud segment sells and supports products that are deployed in a cloud environment. The Company’s product portfolio includes premises and cloud-based enterprise communications infrastructure products and solutions, unified communications and collaboration (UCC) and contact center applications and a range of service offerings. The Company’s Cloud Division offers a range of private, public, hybrid and mobile Software as a Service (SaaS) solutions for businesses of all sizes. This includes Unified Communications as a Service (UCaaS) solutions. Its Enterprise Division portfolio integrates voice, UCC applications, and contact center applications on fixed and mobile networks across a range of end user devices.

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