After the recent first quarter earnings announcement, the stock price rose 19% to $224. Atlassian Corporation(NASDAQ:TEAM) shareholders will be happy this week. The results are not good, especially considering that statutory losses increased 91% to $0.48 per share. Sales of $1.2 billion beat estimates by 2.8%, but that seems to be some cold comfort. Following these results, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a major change to the company’s prospects, or if it’s business as usual. Readers will be happy to know that we’ve compiled the latest statutory forecasts to see if the analysts have changed their minds on Atlassian after its latest performance.
Check out our latest analysis for Atlassian.
NASDAQGS:TEAM Earnings and Sales Growth November 2, 2024
Considering the latest results, the current consensus of 26 analysts is for the company to achieve sales of $5.09 billion in 2025. This reflects a significant 12% increase in sales over the past 12 months. Losses are expected to narrow to US$1.32, down 12% from last year. Before the earnings release, analysts had expected 2025 revenue of $5.07 billion and a loss of $0.82 per share. Sales estimates for the year have remained stable, but earnings per share estimates have also increased significantly, suggesting the consensus on the stock is somewhat mixed.
Analysts are now expecting larger losses, but the average price target is up 15% to 218.5248, suggesting these losses are ‘one-off’ or not expected to have a long-term impact on the business. However, since the consensus price target is actually an average of analysts’ price targets, it may be unwise to fixate on just one price target. Therefore, some investors like to look at the range of estimates to see if there are mixed opinions on what the company is worth. Currently, the most optimistic analyst values Atlassian at $420 per share, while the most pessimistic values it at $180. This is a fairly wide range of estimates, suggesting analysts are predicting a variety of outcomes for the business.
Of course, another way to look at these forecasts is to place them in context about the industry itself. It’s clear that there are expectations that Atlassian’s revenue growth will slow significantly, with revenue expected to grow 16% on an annualized basis through the end of 2025. This is significantly lower than the 24% growth rate recorded over the past five years. In comparison, other companies in the same industry covered by analysts are expected to post annual revenue growth of 12%. So while Atlassian’s revenue growth is expected to slow, it is still expected to grow faster than the industry itself.
conclusion
Most importantly, analysts upgraded their earnings per share estimates for next year. Fortunately, they also double-checked the sales numbers, suggesting they were trending in line with expectations. Data also shows that sales are expected to grow faster than the broader industry. Analysts raised their price target, believing the intrinsic value of the business will improve over time.
In line with this thinking, we believe the long-term prospects of the business are much more important than next year’s performance. We have forecasts for Atlassian out to 2027, which you can see for free on the platform here.
But you still need to be aware of the risks. For example, Atlassian has everything you need to know: warning sign There are things.
Valuation is complex, but we want to simplify it.
Fair value estimates, potential risks, dividends, insider trading and financial condition. Find out whether Atlassian is undervalued or overvalued with our detailed analysis, including:
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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using unbiased methodologies and are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take into account your objectives, or your financial situation. We aim to provide long-term analysis based on fundamental data. Our analysis may not take into account the latest price-sensitive company announcements or qualitative data. Simply Wall St has no position in any of the stocks mentioned.
