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

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In the latest trading session, Atlassian (TEAM) closed at $191.59, marking a +1.93% move from the previous day. The stock lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.05%.

Heading into today, shares of the company had gained 5.28% over the past month, outpacing the Computer and Technology sector's loss of 15.41% and the S&P 500's gain of 4.44% in that time.

Atlassian will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. On that day, Atlassian is projected to report earnings of $0.26 per share, which would represent year-over-year growth of 8.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $717.84 million, up 28.29% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Atlassian. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.03% lower. Atlassian is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Atlassian is holding a Forward P/E ratio of 127.39. Its industry sports an average Forward P/E of 43.21, so we one might conclude that Atlassian is trading at a premium comparatively.

Also, we should mention that TEAM has a PEG ratio of 6.37. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TEAM's industry had an average PEG ratio of 2.37 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 137, which puts it in the bottom 46% 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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