Atlassian stock jumped Friday in response to the productivity software seller’s solid earnings report and revenue forecast.
After the market close Thursday, Atlassian (ticker: TEAM) reported per-share earnings of 57 cents for its fiscal fourth quarter ended in June, outpacing the consensus analyst estimate of 44 cents. The company notched revenue of $939.1 million during the period, surpassing estimates for $914.8 million.
Shares of the developer of list-making tool Trello jumped 20% to $202.98 on Friday.
Investor confidence was likely boosted by
Atlassian
‘s sales forecast for its cloud segment. For the fiscal year 2024, management expects sales from cloud-based product subscribers to grow by 25% to 30%, largely in line with expectations for 30% growth.
Chief Financial Officer Joe Binz expressed optimism about the cloud segment in Thursday’s earnings call. The company anticipates growth rates to gradually improve over the fiscal year as customers increasingly transition from data centers to the cloud offering. That’s an improved tone from the previous earnings call in May, when Atlassian alluded to customer spending uncertainty as a significant concern for its cloud segment.
That macroeconomic challenge hasn’t totally disappeared, some analysts noted.
William Blair’s Arjun Bhatia said the company is “not out of the macro woods yet,” but that positive signs of recovery are starting to appear. Bhatia rates the stock at Outperform without a price target.
Mizuho Securities analyst Gregg Moskowitz also rates the stock Buy, with a $240 price target for the price, implying a 38% upside from Thursday’s close. “TEAM remains one of our best ideas over the next 12 months, and we also believe it will likely be one of the biggest winners as the macro environment improves,” he wrote in a Friday note.
Truist analyst Joel Fishbein, meanwhile, kept his Hold rating on the stock Friday, while raising his price target by $50 to $200. He noted multiple growth drivers for Atlassian, including robust customer buying activity and strong pricing driven by the expiration of loyalty discounts. But for now, he is waiting to get a better sense of fundamentals before becoming more bullish on the shares.
Write to Karishma Vanjani at [email protected]
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