2024-05-19 11:45:48 ET
Summary
- Atlassian's stock has dropped 10% after reporting strong fiscal Q3 results, bringing its year-to-date losses to over 20%.
- Third-party app sales are becoming a significant part of Atlassian's revenue, growing over 40% year-over-year. This helped to drive a re-acceleration in revenue growth.
- The company is accelerating its rollout of AI-driven features, including natural language automation rules and virtual service desk configuration.
- Given Atlassian is still part of the "Rule of 40" club, the stock's current ~9x FY25 revenue multiple is buyable.
Investors have been a tough crowd to please so far this earnings season, with even strong "beat and raise" quarters often producing double-digit declines in stock price. This is an indication that the market rally may be reaching a later stage and that we're overdue for a downward multiples reset....
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Atlassian: More Attractive After The Dip (Rating Upgrade)