Summit Redstone Starts Atlassian Corp. (TEAM) at Buy; Large Peers Not as Focused on Team Collaboration
- Wall Street falls with financials, other post-election gainers
- The FTC Confirms Antitrust Charges Against Qualcomm (QCOM) for Monopolizing Semiconductor Device Used in Cell Phones
- United Airlines (UAL) Tops Q4 EPS by 5c
- Obama shortens sentence of Manning, who gave cables to WikiLeaks
- After-Hours Stock Movers 01/17: (SHLO) Higher; (GIMO) (AFAM) (CSX) Lower (more...)
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial here.
Summit Redstone starts Atlassian Corp. (Nasdaq: TEAM) with a Buy rating and $35 price target.
Analyst Jonathan Kees commented today on the initiation:
Atlassian (TEAM) is unique from the start: from its differentiated, on-line sales model to its no-hassle, no discounting pricing to its high-growth, already profitable and generating cash business. We believe this company continues to invest in its competitive advantages as it grows share especially from larger competitors who are not as focused. Despite TEAM’s high multiples, we believe that its valuation should become more justified as the company grows sales, produces profits, and generates cash along with strengthening its already strong balance sheet (no debt, $743M in cash & investments). We initiate with a BUY and a $35 price target based on 8.9x EV to FY2018 revenues of $769M which is also in line with our DCF calculations. We believe TEAM’s competitive advantages remain viable for the immediate future, TEAM’s large recurring segment (~80% of total revenues) makes for consistency in reporting results, and TEAM should continue its upward trajectory.
TEAM is gaining share from larger peers like IBM, Microsoft, and HP. They are not as focused as TEAM on team collaboration solutions and communications. The TAM is large for TEAM and can increase when targeting users outside of the traditional developers group. Even when excluding potential customers who require traceability requirements and certain compliance standards met, TEAM should be able to continue to grow its customer base. We see open source more of a long term threat, the analyst noted.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: JPMorgan Downgrades OneMain (OMF) to Neutral
- Deutsche Bank Starts VWR Corp. (VWR) at Hold
- Deutsche Bank Starts Thermo Fisher Scientific (TMO) at Buy
Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!