ASAN - Atlassian: Long-Term Prospects Are Alive But Wait For A Better Entry Point
2024-04-03 04:57:12 ET
Summary
- Atlassian's Q2 FY24 earnings showed revenue and earnings growth of 21% YoY and 43% respectively. The stock has severely underperformed the indices YTD.
- The company is focusing on expanding upmarket, launching new products, and migrating customers to the cloud, while expanding its overall profitability.
- However, there are risks in the SMB customer segment, potential churn from cloud migration, and a competitive market. Given its current valuation, I rate TEAM stock a “hold”.
Introduction & Investment Thesis
Atlassian ( TEAM ) is a team collaboration and productivity software provider that has severely underperformed the S&P 500 and Nasdaq 100 YTD. The company announced its Q2 FY24 earnings report , where revenue and earnings grew by 21% YoY and 43% YoY, respectively. While the company is heavily investing in product innovation by launching targeted solutions to boost productivity and improve business outcomes, gaining market share by targeting enterprise customers, successfully migrating its customers from Server and Data Centers over to the Cloud, and growing its profitability, it faces some short-term risks that may put pressure on the company’s stock valuation....
Atlassian: Long-Term Prospects Are Alive, But Wait For A Better Entry Point