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Here's Why Atlassian (TEAM) Stock Could Rally Further

Atlassian TEAM is currently one of the top-performing stocks in the technology sector. The stock’s price rally reflects the company’s robust fundamentals. Therefore, if you haven’t taken advantage of the share-price appreciation yet, it’s time you add the stock to your portfolio now.

The company has performed brilliantly over the past year and has the potential to carry on the momentum further.

Why an Attractive Pick?

Share-Price Appreciation: Atlassian’s price trend reflects that the stock has had an impressive run on the bourse over the past year. Shares of the company have surged 53.8% compared with the S&P 500’s rally of 51.2%.

Solid Rank & Growth Score: Atlassian currently carries a Zacks Rank #2 (Buy) and has a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions: Out of the 10 analysts covering the stock, five have raised the estimates for fiscal 2021 over the past seven days, while none have revised their estimates downward. For fiscal 2022, four out of 10 analysts raised estimates with no downward estimate revisions over the past week. During the same period, the Zacks Consensus Estimate for fiscal 2021 and 2022 moved 7.2% and 2.2% north, respectively.

Positive Earnings Surprise History: Atlassian has an impressive earnings surprise history. The company outpaced estimates in all the trailing four quarters, delivering an average earnings surprise of 20.1%.

Solid Growth Prospects: The Zacks Consensus Estimate of $1.19 for fiscal 2021 earnings suggests growth of 3.5% from the previous fiscal year. Moreover, fiscal 2022 earnings are likely to register 18.9% growth and reach $1.41 per share. The long-term earnings per share growth rate is estimated to be 22.5%.

Growth Drivers: Atlassian is benefiting from the rising demand for remote-working tools amid the pandemic-induced social-distancing measures and restrictions. The company is poised to grow on the massive digitalization of work in organizations, big or small.

Apart from this, integration with leading applications like Slack, Dropbox, and Adobe, along with partnerships with Amazon’s AWS and Microsoft, will likely expand the Atlassian paying user base.

Furthermore, improvement in product quality and performance, multiple product launches, transparent pricing and the unique sales strategy is a positive. The expansion of its product portfolio through acquisitions with the likes of Trello, Code Barrel, Good Software, and AgileCraft is expected to accelerate growth momentum.

Considering Atlassian’s growth prospects, it makes sense to invest for long-term gains.

Other Stocks to Consider

A few other top-ranked stocks in the broader technology sector are Dropbox DBX, Adobe ADBE and Texas Instruments TXN, each carrying a Zacks Rank of 2, at present.

The long-term earnings per share growth rate for Dropbox, Adobe and Texas Instruments is pegged at 40.9%, 18.3% and 9.3%, respectively.

Zacks Top 10 Stocks for 2021

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Adobe Inc. (ADBE): Free Stock Analysis Report
 
Texas Instruments Incorporated (TXN): Get Free Report
 
Atlassian Corporation PLC (TEAM): Get Free Report
 
Dropbox, Inc. (DBX): Free Stock Analysis Report
 
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