Atlassian Jumped More Than 30% After Guiding Next Year's Growth Down to 18%. The Market Bought the Margins.
A slower forecast and a soaring stock look like a contradiction. The profit line resolves it.
Overview
Shares of Atlassian (NASDAQ: TEAM) soared more than 30% Friday morning, as of this writing, after the collaboration-software company reported fiscal fourth-quarter results Thursday afternoon. The odd part is what the report actually said. Management expects subscription annual recurring revenue (ARR) to grow about 18% in fiscal 2027, a step down from the 23% rate the company just delivered.
A slower forecast usually punishes a software stock. So what did investors see that outweighed one?
Details
I'd point to the profit line. Atlassian has spent years growing quickly while losing money under generally accepted accounting principles (GAAP). In the fiscal fourth quarter, the growth finally showed up with profits attached.
Source
Originally published at www.fool.com.