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Investing.com - Bernstein analyst lowered the price target on Atlassian Corporation (NASDAQ:TEAM) to $296.00 from $310.00 on Friday, while maintaining an Outperform rating following the company’s fourth-quarter earnings report. The new target still represents significant upside potential, with analyst targets ranging from $196 to $480, according to InvestingPro data.
The software company delivered what Bernstein described as "exactly the earnings they needed," with revenue and cloud revenue beating expectations by 2.2% and 2.7% versus the midpoint, representing a significant improvement quarter-over-quarter despite challenging macroeconomic conditions in April and early May. The company maintains impressive gross profit margins of 82.31% and has achieved 19.12% year-over-year revenue growth.
Atlassian’s management expressed increased visibility and control over their enterprise sales pipeline, attributing this improvement to their new sales leader hired two quarters ago and enhanced tooling, which allows them to guide and deliver with greater confidence as they shift toward a larger enterprise sales focus. For deeper insights into Atlassian’s financial health and growth prospects, InvestingPro subscribers can access exclusive analysis and 10+ additional ProTips.
The company provided initial fiscal year 2026 guidance of 18% growth, which Bernstein interprets as conservative, suggesting potential for normal beat-and-raise performance that could deliver 21%+ growth for the year.
This outlook supports Atlassian’s credibility in reaching its three-year 20% compound annual growth rate (CAGR) target, despite the modest reduction in Bernstein’s price target.
In other recent news, Atlassian Corporation reported strong fourth-quarter results with total revenue growth of 22% year-over-year, surpassing Wall Street’s expectation of 20%. The company also saw significant performance in large deals and robust cloud migration activity. Despite these positive earnings, several investment firms have lowered their price targets for Atlassian. TD Cowen reduced its target to $220, citing concerns about artificial intelligence affecting software-as-a-service companies. Mizuho (NYSE:MFG) adjusted its target to $235 but maintained an Outperform rating, acknowledging the solid revenue growth. Raymond (NSE:RYMD) James set a new target of $250, noting the company’s strong Cloud business performance as a key driver. Goldman Sachs, while lowering its target to $260, highlighted Atlassian’s cloud revenue growth of 26%, which exceeded guidance. Capital One (NYSE:COF) downgraded the stock from Overweight to Equal-weight, lowering its target to $211 due to AI competition concerns and valuation challenges.
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