Is There Now An Opportunity In Atlassian Corporation Plc (NASDAQ:TEAM)?

Let's talk about the popular Atlassian Corporation Plc (NASDAQ:TEAM). The company's shares received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$258 at one point, and dropping to the lows of US$211. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Atlassian's current trading price of US$228 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Atlassian’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Atlassian

What's the opportunity in Atlassian?

According to my valuation model, Atlassian seems to be fairly priced at around 5.02% above my intrinsic value, which means if you buy Atlassian today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $216.79, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Atlassian’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Atlassian?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. In the upcoming year, Atlassian's earnings are expected to increase by 68%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? TEAM’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on TEAM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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