Atlassian Corporation (Ticker: TEAM) is an Australian software company that develops products for software developers and project managers. The stock price has soared more than 90% Since the lows of the last march, However, analysts are saying the company still has a strong run ahead of it!
Atlassia’s products are designed to streamline workplace digital operations. The Australian-based company is responsible for Jira, the well-known issue tracking app, and Confluence, a team collaboration software. Atlassian has seen demand for its products grow over the course of the ‘COVID year;’ the push to online work through telecommuting and remote offices has put a premium on quality office software.
This is clearly visible in the run of the company’s recent fiscal second quarter results. Atlassian saw its revenues grow sequentially from $459.5 million to $501.4 million, a gain of 9.1%. The year-over-year gain was even more impressive, at 22%. The company’s liquidity position is solid, too, with $180 million in free cash flow for 3QFY21, and a cash-on-hand position of $1.8 billion.
The fiscal results came along with solid customer growth during the quarter. The company added a net of 11,600 new customers to rolls, and finished the quarter with a total customer count exceeding 194,000. This includes active subscriptions and maintenance agreements.
Like most of the business world, Atlassian saw losses last winter when the corona crisis first took hold. The company quickly recovered, and for the past 12 months shows a net share appreciation of 60%.
Covering this stock for Oppenheimer is 5-star analyst Ittai Kidron. He is impressed by the company’s move from server-based products to Cloud-first, and sees the transition as a net-positive for the company. Regarding Atlassian’s investment quality, Kidron takes an unequivocally upbeat position.
“There’s no change to our thesis and bullish stance. The strong results/new customer metrics reinforce our confidence in management’s execution/strategy. And our recent cloud analysis gives us confidence in the soundness/opportunity of Atlassian’s pivot to a cloud-first business model, suggesting good room for upside as the transition unfolds,” Kidron opined.
In line with his optimistic approach, Kidron rates TEAM an Outperform (i.e. Buy), and his $350 price target implies a one-year upside of 47%.
Kidron might be Wall Street’s most prominent TEAM bull, but the business software maker hardly lacks support elsewhere. TEAM’s Moderate Buy consensus rating is based on 11 Buys and 4 Holds. These analysts anticipate shares to rise ~11% from current levels, as the $264.85 average price target indicates.
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