Atlassian has broken out of a cup base with a buy point of 215.77, according to IBD MarketSmith. Shares are in a buy zone. TEAM stock is today's selection for IBD 50 Growth Stocks To Watch.
Shares are on track for a five-day win streak amid news that the enterprise software company has added new AI features to its work collaboration platform, Confluence, and service management feature Jira.
The stock has a Composite Rating of 95 and a perfect EPS Rating of 99. The Relative Strength Rating is 87. TEAM stock ranks first in the specialty enterprise software group.
Atlassian has introduced several AI tools to its platform. Virtual assistants provide chat features for IT and HR teams using its Jira Service Management. Atlassian Intelligence reduces manual tasks such as getting data, while customers can also use natural language when searching for problems. According to Sherif Mansour, Atlassian Intelligence head of product, "previously, it would take hours to mine this data, depending on what it is, and make sense of it all — AI just compresses that time significantly."
The company also provides tools to manage data and security issues through Airtrack.
TEAM stock fell on Nov.3 despite strong fiscal first-quarter earnings the prior day, when the company indicated slower second-quarter sales amid an uncertain outlook.
But the stock rebounded and built a proper base.
TEAM Stock Is Under Accumulation
Sales grew 21% to $977.8 million in the September-ended quarter, while earnings per share of 65 cents were up 81%. The company increased its customers to over 265,000, with more than 40,000 customers contributing more than $10,000 each in annual recurring revenue. Subscription revenue grew 31% to $852 million from the prior year's quarter. Data center and cloud services contributed most to the revenue growth.
Atlassian has a long history of acquisitions. During the quarter, Atlassian acquired Loom, a video messaging platform, for $975 million. The company made previous acquisitions, such as Percept.AI in 2022, which came with a chatbot that Atlassian added to Jira.
For the fiscal second quarter, the company gave revenue guidance of $1 billion, or 15% growth from the prior year.
Mutual funds own 53% of shares outstanding. More funds have been buying TEAM stock over the past three quarters, giving it an Accumulation/Distribution Rating of B+. The Artisan Midcap Fund (ARTMX) and the T. Rowe Price New Horizons Fund (PRNHX) hold shares.
Exchange traded funds that hold shares include First Trust Nasdaq 100 Technology Sector Index Fund and the iShares Expanded Tech-Software Sector ETF.
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