Atlassian shares slump on Cloud revenue miss, analyst downgrade

Shares of Atlassian Corp Plc (NASDAQ:TEAM) were down 14.3% in pre-open trade on Friday following the company's report, which missed Cloud guidance by 1% due to back-end-loaded deals and lower migration demand.

Cloud revenue grew by 31%, missing both the Street’s expectation and the company’s own guidance of 32%, analysts from Jefferies said in a note.

The Management has also set a more conservative growth target for FY25, projecting 23% cloud growth and 27% growth in the first quarter, reflecting a significant reduction from previous targets.

Additionally, analysts at Baird Equity Research have downgraded the stock to Neutral and set a price target of $175, which reflects a valuation of approximately 7.5 times the projected FY26 revenue.

This valuation is positioned at the lower end of the range compared to high-growth SaaS peers, who typically trade at 7-12 times their revenue.

The company posted a fourth-quarter EPS of $0.66, beating the analyst estimate of $0.56 by $0.10. Revenue for the quarter reached $1.13B, surpassing the consensus estimate of $1.08B.

Atlassian Corp Plc projected Q1 2025 revenue between $1.15B and $1.16B, slightly below the analyst consensus of $1.16B. The company attributed the shortfall to back-to-end loaded leads and lower migration demand.

In the last 90 days, Atlassian Corp Plc has seen 22 positive EPS revisions and 1 negative revision.

Related Articles

Atlassian shares slump on Cloud revenue miss, analyst downgrade

Big tech might be selling off, but these value plays are poised for a major rally

AI bubble will burst if the number of AI servers doesn't increase rapidly: fund manager