UPDATE: Bernstein Starts Atlassian Corporation (TEAM) at Outperform
- Wall Street ends sharply higher after Powell comments
- Salesforce (CRM) shares slide despite topping earnings, revenue expectations
- Fed's Powell: Rate hikes to slow, but adjustment just beginning
- Snowflake shares plunge 13% despite Q3 beat
- Market turmoil and economic decline, before recovery in 2023, says JPM's Kolanovic
Bernstein analyst Peter Weed initiates coverage on Atlassian Corporation (NASDAQ: TEAM) with a Outperform rating and a price target of $257.00.
The analyst comments "Since its 2015 IPO, Atlassian's “flywheel” has delivered one of the most consistent 30%+ growth at 30%+ Free Cash Flow stories in Cloud SaaS. We are bullish on Atlassian ability to surpass $6B revenue in FY25 based on it being a key enabler of a major secular tailwind, its current migration of customers to Cloud SaaS offerings at a price premium, and line-of-sight to continued large TAM expansion. Management cautioned on margin as they expect a greater pace of investment to impact operating margin and migration to cloud to lead to lower gross margin. Consensus seems to have conformed to such guidance. However, we don't expect its gross margin to decline to company's guidance of 80%, and expect operating margin to improve modestly as operating expense gains scale leverage. We believe our estimate of FY25E ~$1.5B operating income (26% above consensus) is reasonable. Lastly, we estimate that there would be $1.1B+ of FY2025E revenue at risk if there is a large recession (like '08-09), leaving our FY25E estimates approximately at current consensus (3% below)."
Shares of Atlassian Corporation closed at $191.59 yesterday.
You May Also Be Interested In
- Jones Trading Starts Seven Hills Realty Trust at Buy
- Without a cash infusion Carvana's (CVNA) 'equity value goes to zero' - BofA
- Vertical Research Partners Starts Leonardo DRS (DRS) at Buy
Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesSanford C. Bernstein, IPO
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!