Is it less valuable to participate in a paper with a lot of co-authors?
Being first author, or the most significant author in case it is simply alphabetical, is more important than the number of collaborators.  And the impact of the papers is crucial. I'd take someone who is the key author in top venues over someone who had just their advisor, say, but was less important in impact. 

One key question is how the recruiting committee knows the impact of the student on the publications. That's where reference letters come in.