Atlassian (TEAM) AI Stock Analysis

• Market Cap: $51.97B
• Dividend Yield: N/A
• Average Volume (3M): 2.39M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.36
• Revenue Growth: 23.19%
• EPS Growth: 11.01%
• Country: US
• Employees: 12,750
• Sector: Technology
• Sector Strength: 39
• Industry: Software - Application
• EPS (TTM): -1.33
• Shares Outstanding: 163,992,260
• 10 Day Avg. Volume: 2,102,686
• 30 Day Avg. Volume: 2,390,239
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 7.78
• Price to Cash Flow (P/CF): 26.50
• P/FCF Ratio: 26.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $329.50
• Price Target Upside: 66.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

Atlassian's stock score reflects strong revenue growth and effective cash flow management, offset by challenges in achieving profitability and a bearish technical outlook. The earnings call provided a positive outlook due to strategic investments and strong performance in key segments, but valuation concerns and execution risks remain significant factors.

Positive Factors

Financial Performance

TEAM delivered its 2nd consecutive solid beat-and-raise across the board, and the stock rose 20% after hours.

Market Position

Atlassian was named #1 on Fortune’s 'Future 50' list, which recognizes companies best positioned to grow in an ever-changing environment.

Revenue Growth

Revenue growth beat guidance by 4%, the largest margin since early 2022.

Negative Factors

Comparative Challenges

The company reiterated that it will face the toughest comps of the year in Q3, given the EOL Server deadline in Feb. '24.

Operating Margins

TEAM expects 2H operating margins to be slightly lower than 1H due to some expenses being pushed from 2Q and increased enterprise S&M and R&D investments.

Temporary Benefits

Some of the earnings beat may be short-lived, as it included benefits from time shifting of spend and FX benefits that are likely temporary.

Atlassian Business Overview & Revenue Model

Company Description

Atlassian Corporation, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide. Its product portfolio includes Jira Software and Jira Work Management, a project management system that connects technical and business teams so they can better plan, organize, track and manage their work and projects; Confluence, a connected workspace that organizes knowledge across all teams to move work forward; and Trello, a collaboration and organization product that captures and adds structure to fluid and fast-forming work for teams. The company also offers Jira Service Management, an intuitive and flexible service desk product for creating and managing service experiences for various service team providers, such as IT, legal, and HR teams; and Jira Align, an Atlassian's enterprise agility solution designed to help businesses to adapt and respond dynamic business conditions with a focus on value-creation. In addition, it provides Bitbucket, an enterprise-ready Git solution that enables professional dev teams to manage, collaborate, and deploy quality code; Atlassian Access, an enterprise-wide product for enhanced security and centralized administration that works across every Atlassian cloud product; and Jira Product, a prioritization and road mapping tool. Further, the company's portfolio includes Atlas, a teamwork directory; Bamboo, a continuous delivery pipeline; Crowd, a single sign-on; Crucible, a collaborative code review; Fisheye, a search, track, and visualize code change software; and Compass, a developer experience platform. Additionally, it offers Opsgenie, an on-call and alert management software; Sourcetree, a free git client for windows and mac; Statuspage that communicates real-time status to users; Beacon, an intelligent threat detection software; and Atlassian Access that enhance data security and governance for Atlassian Cloud products. The company was founded in 2002 and is headquartered in Sydney, Australia.

How the Company Makes Money

Atlassian primarily makes money through a subscription-based revenue model, offering its software products as cloud-based services. The company charges customers on a per-user, per-month basis for access to its suite of tools, with different pricing tiers based on features and scale. Atlassian also generates revenue from on-premises software licenses, which include maintenance and support fees. Additionally, the company earns through its marketplace, where third-party developers sell apps and integrations that complement Atlassian's products, with Atlassian taking a percentage of the sales. Strategic partnerships with other technology companies help expand its customer base and enhance its product offerings, contributing to its revenue growth.

Atlassian Financial Statement Overview

Summary

Atlassian exhibits strong revenue growth and effective cash flow management, despite facing profitability challenges. The balance sheet shows moderate leverage and sufficient liquidity, which supports ongoing operations. The focus on expanding revenue while managing costs is evident, though achieving profitability remains a key area for improvement.

Income Statement

Atlassian's TTM revenue growth is positive, increasing from $4.36 billion to $4.79 billion, indicating a healthy growth trajectory. However, the company has negative EBIT and net income, reflecting challenges in achieving profitability. The gross profit margin remains strong at approximately 81.7%, suggesting efficient cost management in generating revenue.

Balance Sheet

The company's balance sheet shows a reasonable debt-to-equity ratio of 1.02, indicating moderate leverage. The equity ratio is 22.4%, suggesting a balanced asset financing structure. The negative net income impacts the return on equity, which is currently negative. However, the substantial cash reserves provide financial stability.

Cash Flow

Atlassian demonstrates strong cash flow generation with a substantial operating cash flow to net income ratio, indicating efficient cash conversion from operations. The free cash flow is robust, and its growth remains stable. The company's free cash flow to net income ratio is also favorable, highlighting strong cash management.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
4.79B	4.36B	3.53B	2.80B	2.09B	1.61B
	Gross Profit
3.92B	3.56B	2.90B	2.34B	1.75B	1.35B
	EBIT
-135.09M	-117.08M	-345.22M	-106.46M	101.63M	14.09M
	EBITDA
1.43M	57.35M	-239.97M	-374.58M	-419.10M	-199.20M
	Net Income Common Stockholders
-346.14M	-300.52M	-486.76M	-614.12M	-696.32M	-350.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
681.99M	2.34B	2.11B	1.46B	1.23B	2.16B
	Total Assets
915.73M	5.21B	4.11B	3.36B	2.95B	3.89B
	Total Debt
507.00K	1.25B	1.28B	1.31B	605.35M	1.15B
	Net Debt
-569.76M	-927.59M	-820.19M	-70.77M	-313.88M	-326.22M
	Total Liabilities
211.10M	4.18B	3.45B	3.03B	2.65B	3.32B
	Stockholders Equity
704.63M	1.03B	654.67M	335.60M	294.91M	575.31M
Cash Flow		Free Cash Flow
1.39B	1.42B	842.30M	808.89M	808.01M	538.50M
	Operating Cash Flow
1.43B	1.45B	868.11M	883.50M	841.33M	574.21M
	Investing Cash Flow
-186.12M	-963.75M	-1.26M	46.85M	256.64M	-318.93M
	Financing Cash Flow
-486.78M	-408.22M	-148.42M	-461.73M	-1.65B	-42.58M

Atlassian Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 198.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEAM, the sentiment is Negative. The current price of 198.35 is below the 20-day moving average (MA) of 222.38, below the 50-day MA of 264.64, and below the 200-day MA of 215.68, indicating a bearish trend. The MACD of -13.45 indicates Negative momentum. The RSI at 36.44 is Neutral, neither overbought nor oversold. The STOCH value of 24.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TEAM.

Atlassian Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCU	77 Outperform	$15.67B	15.13	68.18%	―	7.78%	1345.45%
WDAY	75 Outperform	$62.38B	120.39	6.15%	―	16.94%	-62.24%
HUBS	67 Neutral	$27.53B	6,151.40	0.29%	―	21.07%	―
DDOG	66 Neutral	$34.64B	198.07	7.75%	―	26.12%	274.50%
SNOW	63 Neutral	$49.96B	―	-31.43%	―	29.21%	-51.47%
TEAM	59 Neutral	$51.97B	―	-32.59%	―	23.19%	11.01%
Sector *	57 Neutral	$20.94B	10.43	-13.41%	2.52%	4.53%	-23.34%

Atlassian Corporate Events

Atlassian Announces Changes in Board of Directors

Atlassian Corporation has announced changes in its board of directors. Jay Parikh will retire as a director by the end of 2024 after more than 11 years of service, and Christian Smith, currently Senior Vice President and Chief Revenue Officer at Splunk Inc., will join the board starting January 1, 2025. Smith will contribute his over 25 years of experience to the Nominating and Corporate Governance Committee, receiving compensation in line with Atlassian’s non-employee directors’ arrangements, including a retainer and restricted stock units. This transition reflects Atlassian’s ongoing efforts to strengthen its leadership and governance structures, potentially impacting its strategic direction and stakeholder relationships.