Why Atlassian Shares Collapsed by as Much as 42.6% This Week
Shares of Atlassian (NASDAQ: TEAM) plunged as much as 42.6% this week, according to data from S&P Global Market Intelligence. The company, which sells productivity software to other businesses, posted negative earnings and weak guidance in its latest financial update for investors. As of 1:23 p.m. ET on Friday, shares were down 41.6% for the week.
On Thursday afternoon, Atlassian updated investors on its financial performance for its fiscal 2023 first quarter, which ended Sept. 30. Revenue grew 31% year over year to $807 million, and the company produced adjusted earnings of $0.36 per share. Both of these numbers were close to Wall Street's consensus estimates, and typically in such cases, stocks don't make crazy moves in the days following earnings reports.
Clearly, that wasn't how it played out with Atlassian. Investors are worried about the company's slowing billings growth, which is a forward-looking revenue indicator for software companies. Billings for the quarter were only $798 million, significantly undershooting the Wall Street consensus estimate of $830 million. Its guidance for the current fiscal quarter was also weak, at $845 million vs. the analysts' estimate of $879 million. Considering these big misses, it is no surprise that Atlassian's stock is down this week.
Source Fool.com
