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

Risk & Volatility

Mitel Networks has a beta of 2.67, indicating that its stock price is 167% more volatile than the S&P 500. Comparatively, AppFolio has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Mitel Networks $987.60 million 1.00 -$217.30 million ($2.06) -4.00
AppFolio $105.59 million 13.34 -$8.28 million $0.16 259.39

AppFolio has lower revenue, but higher earnings 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 Mitel Networks and AppFolio’s net margins, return on equity and return on assets.

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

Insider & Institutional Ownership

80.1% of Mitel Networks shares are held by institutional investors. Comparatively, 24.9% of AppFolio shares are held by institutional investors. 16.5% of Mitel Networks shares are held by company insiders. Comparatively, 44.8% of AppFolio shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Mitel Networks and AppFolio, as provided by MarketBeat.

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

Mitel Networks currently has a consensus target price of $12.17, suggesting a potential upside of 47.83%. AppFolio has a consensus target price of $40.50, suggesting a potential downside of 2.41%. Given Mitel Networks’ stronger consensus rating and higher possible upside, research analysts clearly believe Mitel Networks is more favorable than AppFolio.

Summary

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

About Mitel Networks

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.

About AppFolio

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.

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