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Atlassian (NasdaqGS:TEAM) Q1 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Atlassian Corporation Plc (NasdaqGS:TEAM) is scheduled to report Q1 earnings results after markets close for trading on October 29, 2020.

The company is expected to report earnings of $0.27/share on revenue of $441.1 million. The consensus earnings per share (EPS) of $0.27/share is based on a poll of 24 analysts and represents a decline in eps of −1.9% over the same quarter last year, when the company reported earnings of $0.28/share.

The revenue forecast of $441.1 million based on a poll of 22 analysts implies a year-over-year (YoY) growth in revenue of 21.4%. Last year the company reported $363.4 million in revenue for the quarter.

Expected to report EPS contraction of −1.9% for Q1, 2021
Metric Expected Prior Year YoY Change
Revenue $441.13 $363.39 21.4%
EPS $0.27 $0.28 −1.9%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Atlassian Corporation Plc for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q4, 2020 $0.21 $0.25 21.0% Beat
Q3, 2020 $0.21 $0.25 20.8% Beat
Q2, 2020 $0.27 $0.37 35.8% Beat
Q1, 2020 $0.24 $0.28 15.7% Beat
Q4, 2019 $0.16 $0.20 25.6% Beat
Q3, 2019 $0.18 $0.21 16.8% Beat
Q2, 2019 $0.21 $0.25 19.0% Beat
Q1, 2019 $0.19 $0.20 6.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −5.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $187.11 $176.65 −5.6% Decline
April 30, 2020 $152.73 $154.59 1.2% Increase
January 23, 2020 $131.46 $146.79 11.7% Increase
October 17, 2019 $124.28 $116.86 −6.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.04, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.04 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Atlassian Corporation Plc is currently trading at $207.20/share, down −0.6% for the day. The company is trading at approximately 95.8% of its 52-week high of $216.29/share. The company’s stock price is up 17.3% since the last earnings report and down −1.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 65.89 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:TEAM Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −147.25 and a forward P/E multiple of 175.47.

Atlassian Corporation Plc’s current share price also implies a price-to-book (P/B) multiple of 89.75. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q4
Period End Date June 30, 2020
Stock Price (Current) $207.20
P/E Ratio −147.3x
P/E Ratio (Fwd) 175.5x
PEG Ratio −3.2
Total Debt / Total Capital 2.2%
Levered Free Cash Flow $538.5 million
EV / EBITDA 1,066.5x

Finbox

Atlassian Corporation Plc is a large-cap stock with a market capitalization of $51.635 billion and a total enterprise value of $50.532 billion. The company operates in the Information Technology sector and the Software industry.

Atlassian Corporation Plc, through its subsidiaries, designs, develops, licenses, and maintains various software products worldwide. It provides project tracking, content creation and sharing, and service management products. The company’s products include JIRA, a workflow management system that enables teams to plan, organize, track, and manage their work and projects; Confluence, a content collaboration platform that is used to create, share, organize, and discuss projects; and Trello, a collaboration and organization product, which captures and adds structure to fluid fast-forming work for teams. Its products also comprise Bitbucket, a code management and collaboration product for teams using distributed version control systems; and Jira Service Desk, a service desk product for creating and managing service experiences for various service team providers, including IT, legal, and HR teams. In addition, the company offers Opsgenie, an incident management tool that enables IT teams to plan for and respond to service disruptions; Jira Align that enables enterprise organizations build and manage a master plan that maps strategic projects to the various work streams required to deliver them; and other tools comprising Atlassian Access, Bamboo, Crowd, Crucible, Fisheye, Jira Portfolio, Sourcetree, and Statuspage. Atlassian Corporation Plc was founded in 2002 and is headquartered in Sydney, Australia.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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