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Atlassian (TEAM) Surges 3.1%: Is This an Indication of Further Gains?

Atlassian (TEAM) witnessed a jump in share price last session on above-average trading volume. The latest trend in earnings estimate revisions for the stock doesn't suggest further strength down the...

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This story originally appeared on Zacks

Atlassian TEAM shares rallied 3.1% in the last trading session to close at $312.98. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 18.5% loss over the past four weeks.

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Atlassian’s stock appreciated on continued optimism surrounding the demand for remote working tools amid coronavirus-led social distancing measures adopted by governments across the world.

Due to the heightening coronavirus fears amid the emergence of the more contagious Omicron variant, organizations across the globe are advising employees to work from home unless their role on-site is essential to the company. As the demand for offsite working increases, companies offering remote-working software and services like Atlassian are expected to grow exponentially.

Improvement in product quality and performance, multiple product launches, transparent pricing and the unique sales strategy is a positive. The expansion of its product portfolio through acquisitions with the likes of ThinkTilt, Chartio, Halp and Mindville is expected to accelerate growth momentum.

This company is expected to post quarterly earnings of $0.38 per share in its upcoming report, which represents a year-over-year change of +2.7%. Revenues are expected to be $638.63 million, up 27.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Atlassian, the consensus EPS estimate for the quarter has been revised 14.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on TEAM going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>



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