Head-To-Head Comparison: Tenable (NASDAQ:TENB) vs. Avalara (NASDAQ:AVLR)

Tenable (NASDAQ:TENB) and Avalara (NYSE:AVLR) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Profitability

This table compares Tenable and Avalara’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenable -24.14% -64.46% -16.42%
Avalara -15.13% -15.51% -8.69%

Analyst Ratings

This is a summary of current ratings and target prices for Tenable and Avalara, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenable 0 3 7 0 2.70
Avalara 0 0 13 1 3.07

Tenable presently has a consensus price target of $34.11, indicating a potential upside of 41.54%. Avalara has a consensus price target of $86.18, indicating a potential upside of 20.45%. Given Tenable’s higher probable upside, equities research analysts plainly believe Tenable is more favorable than Avalara.

Insider & Institutional Ownership

60.1% of Tenable shares are held by institutional investors. Comparatively, 81.6% of Avalara shares are held by institutional investors. 31.9% of Tenable shares are held by insiders. Comparatively, 21.1% of Avalara shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Tenable and Avalara’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tenable $267.36 million 8.85 -$73.52 million ($1.36) -17.72
Avalara $272.10 million 20.23 -$75.55 million ($1.08) -66.25

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

Risk and Volatility

Tenable has a beta of 2.72, suggesting that its stock price is 172% more volatile than the S&P 500. Comparatively, Avalara has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Summary

Avalara beats Tenable on 10 of the 15 factors compared between the two stocks.

Tenable Company Profile

Tenable Holdings, Inc. provides cybersecurity solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company enterprise software platform enables visibility into an organization's cyber exposure across the attack surface and deep insights that help organizations translate vulnerability data into business insights to understand and reduce their cybersecurity risk. It offers Tenable.io, a software as a service that manages and measures cyber exposure across a range of traditional information technology (IT) assets, such as networking infrastructure, desktops, and on-premises servers, as well as modern IT assets, such as cloud workloads, containers, Web applications, and Internet of Things and operational technology assets; and Tenable.sc, a solution to manage and measure cyber exposure across traditional information technology assets and can be run on-premises, in the cloud, or in a hybrid environment, as well as Industrial Security. The company was founded in 2002 and is headquartered in Columbia, 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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