Atlassian (TEAM-Q)

(A Top Pick Sep 07/22, Down 16%)

The price target is $201.50. He took some profits. They provide software to enhance/assist developers who produce apps. Likes it. Are profitable in software, and have cornered the developer side. Wants to get back into this in the low-$190s or lower.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

EAM is now trading at 12x times' Price/Sales. 
In the 4Q, TEAM’s revenue grew 27% to $872.7M, beating estimates of $866M and EPS of $0.45 beat estimates of $0.33. 
The balance sheet is strong, with long-term debt (excluding leases) of $999M. 
Total debt is around 1.2x times trailing twelve-month cash flow of $850M, and cash flow declined a bit around 4% compared to $884M last year. 
The company also announced a share repurchasing program of $1B over the last few years. 
The company did give out guidance for FY 2023, with revenue growth of 25%, and an operating margin of 17% on a non-GAAP basis. 
The company beat on all metrics but management did mention the reduced cloud guidance, as they see weakness in the cloud driven by free-to-paid conversions of new customers worsening in the quarter in continuing that in the near future. Unlock Premium - Try 5i Free

Solutions to enhance productivity among technical and business teams, mainly developer teams. 3 areas: project management and support, collaboration and software development, lifestyle tools. Recent earnings beat on top and bottom, strong guidance, grew customer base. Well managed. No dividend. (Analysts’ price target is $326.86)

Due to its valuation, the stock is going down. He likes the company, but won't buy it now.