Atlassian (TEAM) AI Stock Analysis

• Market Cap: $71.69B
• Dividend Yield: N/A
• Average Volume (3M): 2.09M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: 23.19%
• EPS Growth: 11.01%
• Country: US
• Employees: 12,157
• Sector: Technology
• Sector Strength: 48
• Industry: Software
• EPS (TTM): -1.33
• Shares Outstanding: 163,992,260
• 10 Day Avg. Volume: 1,842,266
• 30 Day Avg. Volume: 2,093,546
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.38
• Price to Cash Flow (P/CF): 32.00
• P/FCF Ratio: 32.00
• 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: $346.41
• Price Target Upside: 26.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

Atlassian's overall score reflects its strong financial and operational performance, particularly in revenue and cash flow growth, despite challenges in profitability. Positive technical indicators support the stock's upward momentum, although valuation remains a concern due to the negative P/E ratio. The recent earnings call highlights strategic investments and future growth potential, adding to the positive outlook.

Positive Factors

Enterprise Growth

Better-than-expected beat and raise driven by strong enterprise momentum and stable SMB trends.

Financial Performance

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

Negative Factors

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.

Atlassian Business Overview & Revenue Model

Company Description

Atlassian Corporation Plc is a leading enterprise software company based in Australia, known for developing products targeted towards software developers, project managers, and content management. The company's key products include Jira, for project and issue tracking; Confluence, for collaborative content creation; Trello, for task management; and Bitbucket, a Git solution for teams. Atlassian operates in the sector of software development and collaboration tools, providing a suite of products designed to enhance team productivity and efficiency.

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
Income Statement		Total Revenue
4.79B	4.36B
	Gross Profit
3.92B	3.56B
	EBIT
-135.09M	-117.08M
	EBITDA
-39.30M	57.35M
	Net Income Common Stockholders
-346.14M	-300.52M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.34B	2.34B
	Total Assets
5.21B	5.21B
	Total Debt
1.25B	1.25B
	Net Debt
-927.59M	-927.59M
	Total Liabilities
4.18B	4.18B
	Stockholders Equity
1.03B	1.03B
Cash Flow		Free Cash Flow
1.39B	1.42B
	Operating Cash Flow
1.43B	1.45B
	Investing Cash Flow
-186.12M	-963.75M
	Financing Cash Flow
-486.78M	-408.22M

Atlassian Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 273.62
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEAM, the sentiment is Neutral. The current price of 273.62 is below the 20-day moving average (MA) of 301.38, below the 50-day MA of 275.16, and above the 200-day MA of 209.19, indicating a neutral trend. The MACD of -1.04 indicates Positive momentum. The RSI at 40.51 is Neutral, neither overbought nor oversold. The STOCH value of 18.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TEAM.

Atlassian Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MSFT	81 Outperform	$2.89T	31.30	30.64%	0.80%	15.04%	12.38%
WDAY	79 Outperform	$67.47B	129.59	5.82%	―	17.04%	-62.24%
ADBE	78 Outperform	$193.98B	35.94	39.42%	―	11.02%	4.96%
CRM	73 Outperform	$274.98B	45.18	10.13%	0.55%	8.72%	51.47%
NOW	71 Outperform	$186.65B	132.46	14.83%	―	22.44%	-18.31%
TEAM	66 Neutral	$71.69B	―	-28.38%	―	23.19%	11.01%
Sector *	59 Neutral	$22.39B	11.53	-18.05%	2.31%	5.00%	-25.89%

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.