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Atlassian (TEAM) to Report Q4 Earnings: What's in Store?

Atlassian TEAM is set to report fourth-quarter fiscal 2020 results on Jul 30.

During its last earnings call, the company had stated that the coronavirus outbreak had a negligible impact on fiscal third-quarter results. It had also noted that the pandemic’s impact would further worsen in the fiscal fourth quarter, and hence, had issued a wider-than-usual guidance range for the period.

Atlassian projects fiscal fourth-quarter revenues to come between $400 million and $415 million (mid-point $407.5 million). The Zacks Consensus Estimate for revenues is pegged at $408.9 million, suggesting growth of 22.2% from the year-ago reported figure.

The company anticipates non-IFRS earnings of 17-22 cents per share (mid-point 19.5 cents). The Zacks Consensus Estimate is pegged at 20 cents per share.

Notably, the company’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.9%.

Let’s see how things have shaped up for the upcoming announcement.

Factors at Play

Atlassian’s fiscal fourth-quarter performance is expected to have benefited from the rising demand for remote working tools amid the coronavirus-induced global lockdown.

Atlassian Corporation PLC Price and Consensus

Atlassian Corporation PLC Price and Consensus

Atlassian Corporation PLC price-consensus-chart | Atlassian Corporation PLC Quote

The growing adoption of the company’s cloud-based solutions and massive digitalization of work from organizations, big or small, is likely to have driven its quarterly performance. Increasing demand for the company’s cloud products from new customers as well as the existing clients using on-premises products is another tailwind.

Healthy demand for core products like Jira and Confluence, coupled with the rising uptake of new products like Jira Service Desk, Jira Ops and Bitbucket, is anticipated to have been a key growth driver. Improvement in product quality and performance, multiple product launches and increased pricing are likely to have boosted quarterly revenues

Robust growth in subscription revenues, aided by the higher uptake of the company’s cloud-service offerings, will likely reflect on the company’s to-be-reported results as a consistent key catalyst.

What Our Model Says

Our proven model does not predict an earnings beat for Atlassian this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

Though Atlassian has an Earnings ESP of +0.92%, the stock currently carries a Zacks Rank of 4 (Sell).

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Synaptics SYNA has an Earnings ESP of +10.6% and sports a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Facebook FB has an Earnings ESP of +5.28% and currently carries a Zacks Rank of 3.

Alphabet GOOGL has an Earnings ESP of +0.32% and carries a Zacks Rank of 3, currently.

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With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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