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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 - Free Report) closed at $218.14, marking a +1.65% move from the previous day. The stock lagged the S&P 500's daily gain of 1.97%. At the same time, the Dow added 1.88%, and the tech-heavy Nasdaq gained 0.25%.

Prior to today's trading, shares of the company had lost 14.64% over the past month. This has lagged the Computer and Technology sector's loss of 11.71% and the S&P 500's loss of 9.93% in that time.

Wall Street will be looking for positivity from Atlassian as it approaches its next earnings report date. On that day, Atlassian is projected to report earnings of $0.38 per share, which would represent a year-over-year decline of 17.39%. Meanwhile, our latest consensus estimate is calling for revenue of $801.55 million, up 30.54% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.54 per share and revenue of $3.56 billion. These totals would mark changes of -8.88% and +27.06%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Atlassian. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Atlassian is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Atlassian currently has a Forward P/E ratio of 139.65. For comparison, its industry has an average Forward P/E of 43.23, which means Atlassian is trading at a premium to the group.

Investors should also note that TEAM has a PEG ratio of 6.98 right now. 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 2.32 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 94, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

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


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