What's in Store for Atlassian (TEAM) This Earnings Season?

Atlassian TEAM is set to report first-quarter fiscal 2021 results on Oct 29.

Atlassian projects fiscal first-quarter revenues to come in between $430 million and $445 million (mid-point $437.5 million). The Zacks Consensus Estimate for revenues is pegged at $439.4 million, suggesting growth of 20.9% from the year-ago period.

The company anticipates non-IFRS earnings of 26-27 cents per share (mid-point 26.5 cents). The Zacks Consensus Estimate is pegged at 27 cents per share, a penny lower than the 28 cents reported in the year-ago quarter.

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 first-quarter performance is expected to have benefited from the rising demand for remote-working tools amid the COVID-19 pandemic-led work-from-home trend.

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 in 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 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.

Atlassian currently carries a Zacks Rank of 3 and has an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Vishay Intertechnology, Inc. VSH has an Earnings ESP of +6.45% and flaunts a Zacks Rank of 1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet GOOGL has an Earnings ESP of +7.40% and carries a Zacks Rank of 2, currently.

AMETEK, Inc. AME has an Earnings ESP of +0.83% and currently carries a Zacks Rank of 2.

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