Although Atlassian’s TEAM stock has soared +33% this year it may be time to take profits or stay on the sidelines. To that point, Atlassian’s stock looks unpleasantly overvalued at current levels landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Cautious Performance Overview
Being a global leader and innovator in the enterprise collaboration and workflow software space there should be much better opportunities to get in on Atlassian’s intriguing growth.
Going forward investors will want to monitor the premium they are paying for TEAM shares which are still down more than -60% over the last two years despite the impressive YTD rally.
Valuation Concerns
Spiking to 52-week highs of $215 a share in September, Atlassian’s stock has now fallen -11% in the last three months. While double-digit percentage growth is forecasted on Atlassian’s top and bottom lines in its current fiscal 2024 and FY25, TEAM shares still trade at an 83.2X forward earnings multiple.
This is a high premium to the Zacks Internet-Software Industry average of 41.7X and uncomfortably above the S&P 500’s 20.4X. Further alluding to premium risk is that Atlassian’s stock trades at 11X forward sales with the industry average P/S at 2.6X and the benchmark at 3.6X.
Bottom Line
For now, more caution is needed when investing in Atlassian’s stock. Currently trading at $173 a share with weaker valuation ratios, Atlassian has joined the list of tech stocks that may be in a bubble following the sharp rebound in the Nasdaq this year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Although Atlassian’s TEAM stock has soared +33% this year it may be time to take profits or stay on the sidelines. To that point, Atlassian’s stock looks unpleasantly overvalued at current levels landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day.
Cautious Performance Overview
Being a global leader and innovator in the enterprise collaboration and workflow software space there should be much better opportunities to get in on Atlassian’s intriguing growth.
Going forward investors will want to monitor the premium they are paying for TEAM shares which are still down more than -60% over the last two years despite the impressive YTD rally.
Valuation Concerns
Spiking to 52-week highs of $215 a share in September, Atlassian’s stock has now fallen -11% in the last three months. While double-digit percentage growth is forecasted on Atlassian’s top and bottom lines in its current fiscal 2024 and FY25, TEAM shares still trade at an 83.2X forward earnings multiple.
This is a high premium to the Zacks Internet-Software Industry average of 41.7X and uncomfortably above the S&P 500’s 20.4X. Further alluding to premium risk is that Atlassian’s stock trades at 11X forward sales with the industry average P/S at 2.6X and the benchmark at 3.6X.
Bottom Line
For now, more caution is needed when investing in Atlassian’s stock. Currently trading at $173 a share with weaker valuation ratios, Atlassian has joined the list of tech stocks that may be in a bubble following the sharp rebound in the Nasdaq this year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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