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Atlassian (TEAM) to Report Q4 Earnings: What's in the Cards?

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Atlassian Corporation Plc (TEAM - Free Report) is scheduled to report fourth-quarter fiscal 2019 results on Jul 25.

Notably, the company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 12.33%.

In the last reported quarter, the company’s earnings per share of 21 cents beat the Zacks Consensus Estimate of 18 cents and were also much higher than 9 cents reported in the year-ago period.

Moreover, Atlassian’s revenues surged 38% year over year to $309.3 million and surpassed the Zacks Consensus Estimate of $304 million as well.

Outlook and Estimates for Q4

For the fiscal fourth quarter, Atlassian anticipates revenues of $329-$331 million. The Zacks Consensus Estimate is pegged at $330.1 million, up 35.6% from the year-ago reported figure.

On a non-IFRS basis (International Financial Reporting Standards), the company expects earnings per share to be 16 cents, indicating a 23.1% rise from the prior-year reported number.

Atlassian Corporation PLC Price and EPS Surprise

Atlassian Corporation PLC Price and EPS Surprise

Atlassian Corporation PLC price-eps-surprise | Atlassian Corporation PLC Quote

Let’s see, how things are shaping up prior to this announcement.

Factors to Consider

Atlassian’s fourth-quarter fiscal 2019 results are likely to benefit from solid customer wins on the back of a diverse product portfolio.

Notably, the company added more than 5,800 net customers during the last reported quarter, which took the total customer count to 144,038.

Robust growth in the subscription revenues, aided by higher uptake of the company’s cloud service offerings or the data center suite, will remain a key driver in the fiscal fourth quarter. In the last reported quarter, the metric soared 57% year over year.

Healthy demand for core products like Jira and Confluence coupled with the growing adoption of new products like Jira Service Desk, Jira Ops and Bitbucket is expected to remain a tailwind. Moreover, the launch of premium versions of Jira Software and Confluence in the cloud coupled with the addition of cloud features is an upside for the quarter to be reported.

The company envisions the acquisition of AgileCraft to boost its top line in the June quarter.

However, the AgileCraft buyout expenses and increasing investments in research and development are likely to hurt the operating margins in the to-be-reported quarter.

What Our Model Says
    
The proven Zacks model shows that a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has maximum chances of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Atlassian currently carries a Zacks Rank #2, which increases the predictive power of ESP. However, its Earnings ESP of 0.00% in the combination makes surprise prediction difficult for the stock this time around.

Stocks to Consider

Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Helix Energy Solutions Group, Inc. (HLX - Free Report) has an Earnings ESP of +15.66% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CGI Group, Inc. (GIB - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank of 2.

Thermo Fisher Scientific Inc. (TMO - Free Report) has an Earnings ESP of +0.54% and is a Zacks #2 Ranked player.

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