Atlassian (TEAM) To Report Earnings Tomorrow: Here Is What To Expect

Jabin Bastian /
2023/05/03 3:34 am EDT
Add to Watchlist

IT project management software company, Atlassian (NASDAQ:TEAM) will be announcing earnings results tomorrow after market hours. Here's what investors should know.

Last quarter Atlassian reported revenues of $872.7 million, up 26.7% year on year, beating analyst revenue expectations by 2.74%. It was a mixed quarter for the company, with a decent beat of analyst estimates but decelerating customer growth. The company added 4,004 customers to a total of 253,177.

Is Atlassian buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Atlassian's revenue to grow 21.8% year on year to $901.8 million, slowing down from the 30.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.33 per share.

Atlassian Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 4.8%.

Looking at Atlassian's peers in the productivity software segment, some of them have already reported Q3 earnings results, giving us a hint what we can expect. Pegasystems's revenues decreased 13.5% year on year, missing analyst estimates by 7.14% and ServiceNow reported revenues up 21.7% year on year, exceeding estimates by 0.5%. Pegasystems traded up 4.19% on the results, ServiceNow was up 2.01%. Read our full analysis of Pegasystems's results here and ServiceNow's results here.

There has been a stampede out of high valuation technology stocks and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 9.49% over the last month. Atlassian is down 11.2% during the same time, and is heading into the earnings with analyst price target of $200, compared to share price of $147.9.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.