Atlassian shares fall due to falling company profits
2023.02.03 09:29
Atlassian shares fall due to falling company profits
By Ray Johnson
Budrigannews.com – Atlassian shares (NASDAQ🙂 are trading about 9% lower in the premarket on Friday following the company’s announcement of subscription revenue that was lower than anticipated.
The analyst consensus estimate for Atlassian FQ2 earnings per share (EPS) was $0.43 on revenue of $877.18 million, while subscription revenue increased by 40%, still falling short of the analyst consensus.
The company expects revenue of $890 million to $910 million this quarter, which is in line with the consensus estimate of $900,92 million. Raymond James analysts reiterated their Market Perform rating on TEAM stock, stating that the “cloud continues to disappoint.”
“We should note that customer feedback suggests that churn is not a problem, and at the moment, we believe this is more of a timing issue than a structural issue.
However, this trend coincides with pressure from the SMB customer group, which has become increasingly hesitant to switch from free to paid subscriptions.
We are becoming increasingly concerned that this may spread to the entire customer base. They stated, “We anticipate stabilization in the business and a better setup for FY24.”
The results, according to Truist analysts, indicate that TEAM is facing more challenges.
Their cloud business growth outlook was lowered for the second time in a row as a result of growing headwinds in the quarter.
Further examination reveals that the outperformance in the quarter was driven by their on-premises businesses, while concerns persist for the remainder of the year due to disappointment in the cloud segment. In a client note, the analysts stated:
“We believe the company has reset guidance to a beatable level, but after the valuation run-up to start the year, we remain Hold rated as we await better visibility and a more attractive entry point to put new money to work.”
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