What Happened?
Shares of IT project management software company, Atlassian (NASDAQ:TEAM) jumped 5.4% in the afternoon session as equities soared (Nasdaq +1.2%, S&P 500 +0.9%) after The Bureau of Labor Statistics reported nonfarm payrolls for September 2024, which exceeded expectations. Notably, nonfarm payrolls increased by 254,000, significantly surpassing the consensus estimate of 150,000. In addition, the unemployment rate clocked in at 4.1%, slightly below analysts' expectations of 4.2%.
Overall, the report supports the Fed's favored "soft landing" narrative, suggesting that inflation can be controlled without significantly harming the economy. After the initial pop the shares cooled down to $171.88, up 0.5% from previous close.
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What The Market Is Telling Us
Atlassian’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 17.4% on the news that the company reported second-quarter earnings results. Its full-year revenue guidance was below expectations, and its revenue guidance for next year suggests a slowdown in demand. Notably, cloud revenue came in softer than expected due to lower-than-expected migrations from data centers and elongated sales cycles. Lastly, management took a more conservative approach to guidance due to macro concerns and execution risks. Overall, this was a bad quarter for Atlassian.
Atlassian is down 24.2% since the beginning of the year, and at $171.88 per share, it is trading 33.2% below its 52-week high of $257.43 from January 2024. Investors who bought $1,000 worth of Atlassian’s shares 5 years ago would now be looking at an investment worth $1,303.
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