Critical Analysis: VMware (NYSE:VMW) versus Atlassian (NYSE:TEAM)
VMware (NYSE:VMW) and Atlassian (NASDAQ:TEAM) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.
This table compares VMware and Atlassian’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This table compares VMware and Atlassian’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|VMware||$8.97 billion||7.87||$2.42 billion||$4.93||34.89|
|Atlassian||$873.95 million||16.16||-$119.34 million||($0.07)||-1,900.00|
VMware has higher revenue and earnings than Atlassian. Atlassian is trading at a lower price-to-earnings ratio than VMware, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
VMware has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Atlassian has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.
Institutional and Insider Ownership
17.9% of VMware shares are held by institutional investors. Comparatively, 92.4% of Atlassian shares are held by institutional investors. 28.8% of VMware shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of current recommendations for VMware and Atlassian, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
VMware presently has a consensus price target of $192.90, indicating a potential upside of 12.15%. Atlassian has a consensus price target of $118.14, indicating a potential downside of 11.17%. Given VMware’s stronger consensus rating and higher possible upside, research analysts clearly believe VMware is more favorable than Atlassian.
VMware beats Atlassian on 11 of the 14 factors compared between the two stocks.
VMware Company Profile
VMware, Inc. provides software in the areas of hybrid cloud, multi-cloud, modern applications, networking and security, and digital workspaces in the United States and internationally. The company offers compute products, including VMware vSphere, a data center platform, which enables users to deploy hypervisor, a layer of software that resides between the operating system and system hardware to enable compute virtualization; and cloud management products for businesses with automated operation, programmable provisioning, and application monitoring solutions. It also provides networking and security products and services that enable customers to connect, secure, and operate their network consistently within and across the data center, cloud, and network edges; and storage and availability products, including data storage and protection options. In addition, the company offers VMware Cloud Foundation, a platform that brings together its compute, storage, and networking technologies into an integrated stack and delivers enterprise-ready cloud infrastructure for private and public clouds; and VMware Pulse IoT Center, an Internet of Things device management and monitoring solution. Further, it provides hybrid cloud computing solutions, such as VMware Cloud Provider Program, VMware Cloud Foundation, and VMware Cloud Services; and end-user computing solutions, such as Workspace ONE that delivers and manages any application on any device by integrating access control, application management, and multi-platform endpoint management. The company sells its products through distributors, resellers, system vendors, and systems integrators. VMware, Inc. has a strategic alliance with Amazon Web Services to build and deliver an integrated hybrid solution. The company was incorporated in 1998 and is headquartered in Palo Alto, California. VMware, Inc. is a subsidiary of Dell Technologies Inc.
Atlassian Company Profile
Atlassian Corporation Plc, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide. It provides project tracking, content creation and sharing, and service management products. The company's products include JIRA, a workflow management system that enables teams to plan, organize, track, and manage their work and projects; Confluence, a content collaboration platform that is used to create, share, organize, and discuss projects; and Trello, a Web-based project management application for capturing and adding structure to fluid, fast-forming work for teams. Its products also comprise Bitbucket, a code management and collaboration product for teams using distributed version control systems; and Jira Service Desk, a service desk product for creating and managing service experiences for various service team providers, including IT help desks, and legal and HR teams. In addition, the company offers other tools, such as Atlassian Access, Bamboo, Crowd, Crucible, Fisheye, Sourcetree, and Statuspage. It has a strategic partnership with Zoom Video Communications, Inc. Atlassian Corporation Plc was founded in 2002 and is based in London, the United Kingdom.
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