Atlassian‘s (TEAM) drive to convert its customers to cloud-computing hosted services will lift average selling prices, analysts say. Atlassian stock continued to rally Monday after the software maker accelerated plans to phase out server licenses, a move aimed at migrating customers to cloud-based offerings.
The Atlassian stock move came ahead 2021 fiscal first quarter earnings report, due Oct. 29. Shares in Atlassian rose 0.9% to near 209.30 in recent action on the stock market today. That follows a 4.3% gain on Friday.
Gregg Moskowitz, analyst at Mizuho Securities, on Monday raised his price target on Atlassian stock to 240 from 210.
“In a blog post published Friday, (Atlassian) announced plans to discontinue new license sales of its server products on Feb. 2, 2021, in order to accelerate customer adoption of, and migration to, cloud-based offerings,” Moskowitz said in a report to clients. He added: “In addition, (Atlassian) will be terminating server support on Feb. 2. Meanwhile, (Atlassian’s) premium data center subscription prices will also increase.”
With first-quarter earnings due on Oct. 29, investors may want to be cautious. Also, one trading strategy for investors heading into company earnings reports is using call options.
Atlassian Stock: Fiscal Q1 Earnings
Founded in Australia, Atlassian sells project-management and collaborative software for software developers and tech department engineering teams. The company has shifted software tools to the cloud infrastructure of Amazon Web Services, part of Amazon.com (AMZN).
In addition, analysts expect Atlassian to report fiscal first-quarter earnings of 27 cents a share, down a penny from the year-earlier period. Further, revenue will climb 25% to $440.5 million, analysts estimate.
Founded in Sydney in 2002, Atlassian gets two-thirds of its revenue from Jira project-tracking tools and its Confluence document-collaboration software.
Meanwhile, Atlassian stock has advanced about 74% in 2020.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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