Market Overview

Goldman Sachs Upgrades Atlassian, Encouraged By Outlook

Goldman Sachs Upgrades Atlassian, Encouraged By Outlook

The fourth-quarter consensus billings estimate for Atlassian Corporation PLC (NASDAQ: TEAM) reflects low deferred revenue expectations and appears conservative, according to Goldman Sachs.

The Analyst

Heather Bellini upgraded Atlassian from Neutral to Buy and raised the price target from $115 to $125.

The Thesis

At $361 million, the consensus billings estimate for the fiscal fourth quarter represents 30-percent year-on-year growth, but is lower than Goldman Sachs’ projection of $376 million, Bellini said in the Wednesday downgrade note. (See her track record here.) 

Deferred revenue seasonality should normalize following the previous quarter’s underperformance, the analyst said. 

Atlassian has a “unique low-friction online sales model" that reduces discounting as well as S&M expense, Bellini said. This means the software company is able to reallocate its S&M savings to R&D, which positions it well for price hikes as it enhances its product offerings, she said.

Even after two years of price increases, Atlassian’s offerings represent a high value-to-price ratio for customers, the analyst said. 

In the longer-term, the penetration of Atlassian’s products in the IT organization will present natural cross-sell and expansion opportunities with other organizations, including customer service and HR, according to Goldman Sachs. 

Price Action

Atlassian shares were trading up 1.66 percent at $119.11 at the time of publication Thursday.

Related Links:

Atlassian Q2 Earnings Preview

Analysts Hold Stances On Atlassian Following A 'Ripper' Of A Quarter

Photo courtesy of Atlassian. 

Latest Ratings for TEAM

Oct 2019UpgradesNeutralBuy
Oct 2019Initiates Coverage OnBuy
Jul 2019MaintainsOutperform

View More Analyst Ratings for TEAM
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Heather BelliniAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (TEAM)

View Comments and Join the Discussion!

Latest Ratings

VIACJP MorganReinstates50.0
NUVASVB LeerinkMaintains92.0
SRPTCantor FitzgeraldMaintains211.0
LULUGoldman SachsMaintains219.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Cronos Group More Than Doubles Revenue, Sales Volume In Q1

Mid-Morning Market Update: Markets Open Lower; Tapestry Earnings Top Expectations