2U (NASDAQ:TWOU) and Avalara (NYSE:AVLR) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.
Institutional & Insider Ownership
81.1% of Avalara shares are owned by institutional investors. 4.9% of 2U shares are owned by company insiders. Comparatively, 21.1% of Avalara shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
2U has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500. Comparatively, Avalara has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.
Earnings & Valuation
This table compares 2U and Avalara’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|2U||$574.67 million||2.76||-$235.22 million||($2.01)||-12.43|
|Avalara||$272.10 million||25.80||-$75.55 million||($1.08)||-84.49|
Avalara has lower revenue, but higher earnings than 2U. Avalara is trading at a lower price-to-earnings ratio than 2U, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for 2U and Avalara, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
2U presently has a consensus price target of $41.00, suggesting a potential upside of 64.13%. Avalara has a consensus price target of $90.87, suggesting a potential downside of 0.42%. Given 2U’s higher possible upside, analysts clearly believe 2U is more favorable than Avalara.
This table compares 2U and Avalara’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Avalara beats 2U on 11 of the 15 factors compared between the two stocks.
2U Company Profile
2U, Inc. operates as an education technology company in the United States, Hong Kong, South Africa, and the United Kingdom. The company operates through two segments, Graduate Program Segment and Short Course Segment. It offers front-end technology and services, including online learning platform, student and faculty and immersion support, accessibility, admissions application advising, in-program student field placements, and faculty recruiting. The company provides back-end technology and services comprising graduate program launch and operations applications, university systems integration applications, content management system, admission application processing portal, customer relationship management, content development, student acquisition, and state authorization services. The company was formerly known as 2Tor Inc. and changed its name to 2U, Inc. in October 2012. 2U, Inc. was founded in 2008 and is headquartered in Lanham, Maryland.
Avalara Company Profile
Avalara, Inc. provides cloud-based solutions for transaction tax compliance worldwide. It offers a suite of compliance solutions that enable businesses to address the complexity of transaction tax compliance; process transactions in real time; produce detailed records of transaction tax determinations; and reduce errors, audit exposure, and total transaction tax compliance costs. The company's solutions include AvaTax, a solution for determining sales tax in the United States; Avalara Returns for tax return preparation, filing, and remittance; and Avalara Compliance Document Management solution, which creates, validates, stores, and manages sales tax exemption and reseller certificates. It also provides professional services, including nexus studies and analysis, voluntary compliance initiatives, tax registrations, and specialized tax research; MatrixMaster, a product taxability database for retail operations; Avalara CloudConnect, a hardware device for processing and storing transactions on-site for regularly scheduled uploads to AvaTax; Avalara Licensing, an online platform for business licenses and sales tax registrations; VAT Expert, a Web-based solution that checks the validity of customer and supplier value-added tax (VAT) numbers and provides VAT determinations in the form of invoices; and Brazilian tax compliance solutions that address the Brazilian transaction tax regimes through electronic compliance report validation, electronic invoice authentication and preparation, tax determination, and returns preparation. The company was formerly known as Advantage Solutions, Inc. and changed its name to Avalara, Inc. in December 2005. Avalara, Inc. was incorporated in 1999 and is headquartered in Seattle, Washington.
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