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Bank Of America Sees Buying Opportunity In Atlassian

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Bank Of America Sees Buying Opportunity In Atlassian

Atlassian Corporation PLC (NASDAQ: TEAM) doesn't need to “perform heroics” to achieve a $10 billion revenue scale by fiscal 2027-2029, with Jira sustaining 30% growth and the company using tuck-in mergers and acquisitions to augment its portfolio in the large and fragmented DevOps market, according to Bank of America.

The Analyst

BofA’s Nikolay Beliov upgraded Atlassian from Neutral to Buy, keeping the price target at $135.

The Thesis

Recent pressure on high-growth software stocks represents a buying opportunity for Atlassian’s shares, Beliov said.

The analyst mentioned a few reasons for recommending the company’s stock. Against a macro slowdown, Atlassian’s model will work better than traditional models, given that the company has “a low-cost/pricing-power, high-quality, low-friction, diversified business model,” Beliov wrote.

See Also: Atlassian Analyst Confident In Software Company's Growth After Q1 Print

He added that Atlassian has a best-in-class durable business model, which is appealing in a low interest environment.

The analyst noted Jira is in its initial stages and the market potential is large. He added that although there’s been a slight delay in transitioning the Server install base to subscription, eventually the company could generate more than $500 million in maintenance revenues from this.

Price Action

Shares of Atlassian rose 3% to $117.82 at time of publishing on Monday.

Latest Ratings for TEAM

DateFirmActionFromTo
Apr 2021DA DavidsonMaintainsBuy
Apr 2021Wells FargoMaintainsOverweight
Jan 2021MizuhoMaintainsBuy

View More Analyst Ratings for TEAM
View the Latest Analyst Ratings

 

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Posted-In: Bank of America Kira Nikolay BeliovAnalyst Color Upgrades Analyst Ratings

Latest Ratings

StockFirmActionPT
GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
View the Latest Analytics Ratings
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