Shares of Atlassian (NASDAQ:TEAM) tumbled 23% in the extended trading session Thursday, after posting dismal results for the first quarter of fiscal 2023. Earnings of $0.36 per share were behind consensus expectations (according to FactSet) of $0.40. The quarterly figure was also down 22% year-over-year.
However, revenues of $807.4 million marginally surpassed estimates by 0.1% and were up from the year-ago quarter figure of $614 million.
Atlassian guided second-quarter revenue between $835 million and $855 million, which is significantly below the analyst consensus expectation of $879.3 million (as per FactSet). In a letter to shareholders, the company noted that slower conversions from free to paid subscriptions negatively impacted revenues from its freemium software. Moreover, fewer paying customers in the last quarter was also a major headwind to the top line.
These trends are likely to continue into the second quarter of the fiscal year as businesses tighten their belts and slow down hiring.
Management also reduced their revenue expectations for the full fiscal year but refrained from providing a specific figure.
Is TEAM a Good Stock to Buy Now?
Wall Street analysts are split in their opinions on Atlassian stock, with a Moderate Buy rating based on seven Buys and three Holds. The price target for TEAM stock is $297.63, which means the price can go up 71% from current levels over the next year.
