Atlassian Stock: Momentum Hard to Stop © Reuters. Atlassian Stock: Momentum Hard to Stop
Atlassian (NASDAQ:TEAM) stock has been on a tear, soaring 125% over the past 12 months.
The productivity and planning software developer is behind products that so many programmers and technology enthusiasts around the world know and love.
Talk to anybody who works at a major software corporation, startup, or open-source programming project, and odds are they’ll be familiar with a handful of Atlassian’s suite of products, such as Jira, Confluence, Bitbucket, Trello, or Hipchat.
Atlassian stock offers the ultimate way to play the broader rise of software development, with products that cover many steps in the software development lifecycle. Despite its recent run, and now-elevated valuation, I am bullish on the stock. (See TEAM stock charts on TipRanks)
Atlassian’s Moat Widens with Acquisitions
The company’s acquisition of Trello in 2017 was a move that effectively solidified its position at the very top of its industry.
There are many alternatives out there. Few, though, are as popular or easy to use as those within Atlassian’s growing ecosystem. Given the complexities involved with learning a new suite of tools and products, Atlassian’s products are sticky, not just for companies that use its products, but for technology employees who’ve gained experience with such products.
The software industry is very fast-moving, and Atlassian continues to demonstrate that it’s at the cutting edge of the “software for software development” industry. As a trusted name in the tech industry, the company has a unique opportunity to upsell its massive client base with new offerings.
Moreover, the continued rise of the work-from-home model should be a multi-year tailwind for TEAM.
Wall Street’s Take
According to TipRanks’ consensus analyst rating, TEAM stock comes in as a Moderate Buy. Out of 16 analyst ratings, there are 10 Buys and six Sells.
The average TEAM price target is $347.54, representing 15.6% downside potential. Analyst price targets range from a low of $275 per share, to a high of $400 per share.
After continued momentum in 2021, shares now find themselves trading at 49.7 times sales. That’s really expensive, even for a fast-growing technology company.
With a quarterly EPS beat streak building up, profound secular tailwinds, and a proven management team, it’s hard to pass up a name like Atlassian.
It’s a dominant software company with room to run, and it’s arguably one of the more intriguing ways to play the ongoing digital transformation.
Disclosure: Joey Frenette doesn’t own shares of any mentioned companies at the time of publication.
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