Head to Head Comparison: New Relic (NEWR) versus Atlassian (TEAM)

New Relic (NYSE: NEWR) and Atlassian (NASDAQ:TEAM) are both mid-cap computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Volatility and Risk

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New Relic has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Atlassian has a beta of 2.28, suggesting that its share price is 128% more volatile than the S&P 500.

Valuation & Earnings

This table compares New Relic 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
New Relic $355.06 million 13.90 -$61.07 million ($0.74) -120.28
Atlassian $619.94 million 10.49 -$42.50 million ($0.03) -2,176.33

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

Insider and Institutional Ownership

75.6% of New Relic shares are owned by institutional investors. Comparatively, 88.7% of Atlassian shares are owned by institutional investors. 23.1% of New Relic shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
New Relic -12.76% -20.60% -11.18%
Atlassian -14.19% -3.18% -2.14%

Analyst Ratings

This is a summary of recent ratings and target prices for New Relic and Atlassian, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Relic 0 5 9 0 2.64
Atlassian 0 5 6 0 2.55

New Relic presently has a consensus price target of $71.21, indicating a potential downside of 19.99%. Atlassian has a consensus price target of $60.78, indicating a potential downside of 6.91%. Given Atlassian’s higher probable upside, analysts clearly believe Atlassian is more favorable than New Relic.

Summary

Atlassian beats New Relic on 8 of the 13 factors compared between the two stocks.

New Relic Company Profile

New Relic, Inc., a software-as-a-service company, provides digital intelligence products worldwide. The company's cloud-based platform and suite of products include New Relic Digital Intelligence Platform, which enables organizations to collect, store, and analyze data. It provides New Relic Application Performance Management that offers visibility into the performance and usage of server-based applications, such as data pertaining to response time, transaction throughput, error rates, transactions, and user satisfaction; New Relic Mobile, which provides code-level visibility into the performance of mobile applications running on the iOS and Android mobile operating systems; and New Relic Browser, a product that monitors the page view experiences of actual end-users for desktop and mobile browser-based applications. The company also offers New Relic Synthetics, which simulates usage and reproduces business-critical functionality that enables its users to test their software throughout the development life cycle; and New Relic Infrastructure that provides information technology operation teams with the visibility into the health performance of their infrastructure. In addition, it provides New Relic Insights that enables technology and business users to perform real-time analysis; New Relic Alerts, a centralized notification system for managing alert policies and alert conditions; New Relic Plugins, which offers a plugin architecture, including application programming interfaces and software development kits for customers and partners to embed and extend its solution into their products; and real-time dashboards for tracking business metrics from a set of application sources, as well as live-state server configuration monitoring across cloud infrastructure. The company sells its products through direct sales organizations, online and offline sales, and marketing activities. New Relic, Inc. was founded in 2007 and is headquartered in San Francisco, California.

Atlassian Company Profile

Atlassian Corporation Plc, through its subsidiaries, provides team collaboration and productivity software solutions worldwide. It offers project tracking, content creation and sharing, real-time communication, and service management products to large and small organizations. 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; HipChat that provides teams a way to communicate in real-time and share ideas, updates, codes, and files; Trello, a Web-based project management application for capturing and adding structure to fluid and fast-forming work for teams; 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. It also offers other tools for software developers, such as FishEye, Clover, Crowd, Crucible, Bamboo, SourceTree, and StatusPage. Atlassian Corporation Plc was founded in 2002 and is based in London, the United Kingdom.

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