Atlassian (TEAM) closed the most recent trading day at $353.44, moving +1.13% from the previous trading session. The stock lagged the S&P 500’s daily gain of 1.17%. Meanwhile, the Dow gained 1.87%, and the Nasdaq, a tech-heavy index, added 0.57%.
Heading into today, shares of the company had lost 20.61% over the past month, lagging the Computer and Technology sector’s loss of 3.09% and the S&P 500’s loss of 2.46% in that time.
Atlassian will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.38, up 2.7% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $638.58 million, up 27.37% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.57 per share and revenue of $2.59 billion. These totals would mark changes of +12.14% and +23.81%, respectively, from last year.
Any recent changes to analyst estimates for Atlassian should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Atlassian currently has a Zacks Rank of #5 (Strong Sell).
In terms of valuation, Atlassian is currently trading at a Forward P/E ratio of 222.61. This valuation marks a premium compared to its industry’s average Forward P/E of 59.82.
Also, we should mention that TEAM has a PEG ratio of 9.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Internet – Software industry currently had an average PEG ratio of 3.76 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 185, putting it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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