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Atlassian Corporation PLC (TEAM) Gains But Lags Market: What You Should Know

Zacks Equity Research

Atlassian Corporation PLC (TEAM) closed the most recent trading day at $135.59, moving +1.95% from the previous trading session. This move lagged the S&P 500's daily gain of 4.94%. Elsewhere, the Dow gained 4.89%, while the tech-heavy Nasdaq added 4.95%.

Coming into today, shares of the company had lost 12.08% in the past month. In that same time, the Computer and Technology sector lost 16.77%, while the S&P 500 lost 17.66%.

TEAM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.20, down 4.76% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $397.42 million, up 28.5% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.07 per share and revenue of $1.60 billion, which would represent changes of +24.42% and +31.86%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for TEAM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.34% higher within the past month. TEAM currently has a Zacks Rank of #2 (Buy).

Digging into valuation, TEAM currently has a Forward P/E ratio of 123.88. This represents a premium compared to its industry's average Forward P/E of 37.69.

Investors should also note that TEAM has a PEG ratio of 5.57 right now. 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. TEAM's industry had an average PEG ratio of 2.33 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 154, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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