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Atlassian Corp. gave up trying to beat Slack and Microsoft Corp. in chat at the workplace, which makes investors and analysts feel even more optimistic about the company's prospects.
Slack would be the acquisition of intellectual property behind Atlassian
TEAM, + 10.06%
Hipchat and Stride discussion platforms, and that these two services would be interrupted accordingly. Atlassian also took a stake in Slack
Shares rose more than 10% in Friday's session. The company also announced sales and profits better than expected.
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The Slack move is a capitulation, Atlassian having struggled to s & # To impose for his two cat products go against the giants. Atlassian's strategy for its communication offerings was to allow companies to use the products for free until they add a number of internal users, to what extent the company should pay. Microsoft
MSFT, -2.85%
recently stated that he would follow a similar strategy for his Teams platform.
Analysts have struggled to contain their excitement.
"We have been complementary to Atlassian 's business model It has been almost ten years now, but with the logical, impressive and frankly brilliant sales of Atlassian' s communications segment at Slack, we have not seen it. TEAM's management team has just increased one notch in our book, "said Canaccord Genuity analyst Richard Davis." Why fight to catch up when you can sell the assets to Slack, get an investment in the business and you refocus on Atlassian's technology-centric collaboration tools? "
He values the title at $ 85.
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John DiFucci, an analyst at Jefferies, was also optimistic. "The financial details of the partnership were rare, although the close integration of a g Workflow (Jira) and a leader and innovator in corporate communications (Slack) seems logical to us, especially as the product approach of these two companies DiFucci commented that the agreement is for several years, "which, in our opinion, relates to the revenues that Atlassian will get from Slack related to the customers in transition." He increased his price target to $ 70 from $ 64, but kept his conservation rating on the stock.
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Ittai Kidron of Oppenheimer is optimistic about what the Company will be able to do focus. "We are positive about the adjustment as Atlassian leaves a market where it is catching up, to double the areas where it has an organic leverage and a significant growth margin," he wrote.
Among the negative points of the publication, according to Kidron, is the management's comment that the company expects headwinds of about $ 1 million for its 2019 fiscal year, which ends in next June. He said, however, that the company's revenue forecast for the full year of 2019 exceeded expectations. Kidron has an outperformance on stocks.
Of the 16 analysts tracked by FactSet that cover Atlassian, eight have buy odds and eight have reserve odds. The average price target is $ 79.45, which is 7.2% higher than recent levels.
The title is currently on track to show its biggest percentage gain in a single day this year. Shares rose 94% in the last 12 months, while the S & P 500
SPX, -0.85%
gained 14%.
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