- Oops!Something went wrong.Please try again later.
It's been a pretty great week for Atlassian Corporation Plc (NASDAQ:TEAM) shareholders, with its shares surging 20% to US$325 in the week since its latest annual results. Revenues were in line with expectations, at US$2.1b, while statutory losses ballooned to US$2.79 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the 19 analysts covering Atlassian are now predicting revenues of US$2.49b in 2022. If met, this would reflect a solid 19% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 88% to US$0.34. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$2.37b and losses of US$0.28 per share in 2022. While this year's revenue estimates increased, there was also a sizeable expansion in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target rose 15% to US$314, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Atlassian analyst has a price target of US$370 per share, while the most pessimistic values it at US$250. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Atlassian's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that Atlassian is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Atlassian. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Atlassian going out to 2024, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Atlassian that we have uncovered.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.