Atlassian $TEAM (IBD New America

Latest New America article is on Atlassian.…

the way we work — by sending emails with Microsoft (MSFT) PowerPoint, Word or Excel attachments and waiting for responses — is stuck in the past.

Atlassian (TEAM) is looking to propel the office into the future with its project-management and collaborative software as more companies take advantage of cloud-based technology and remote work spaces.

“Really, what Atlassian is doing is trying to address how a world might look post-Microsoft Office,” said Rob Oliver, a senior research analyst at Baird. “Their revolutionary product addresses this big problem — how to collaborate effectively in teams. It’s no accident their stock ticker is TEAM.”

Atlassian has a market cap of $12.43 billion and 112,000 customers, ranging from online dating app Tinder to Domino’s Pizza (DPZ) to the U.S. Defense Department.

Last month Atlassian reported fiscal second-quarter results that beat views but gave weak guidance for the third quarter.

“Atlassian could become an acquisition target down the road,” Oliver said, as companies get an influx of cash from the Trump administration’s corporate tax reform

They Charge $10 flat rate for a small team of upto 10 people, the $7 each after that. They don’t market, but count on “land and expand” - one person downloads, starts using it with his team and it tends to go viral. Thus, their gross margin is higher than other software companies that spend lots on marketing.

Majek said its biggest risk is one of the things that makes the company unique, its current sales structure as it grows further.

Majek said Wall Street is expecting a deceleration in growth in sales to 38% in fiscal 2018, then to 28% in fiscal 2019 and 25% in 2020.

“Companies with that model struggle to pass the billion-dollar mark in sales,” he said. “Either they will have to grow a lot slower or get a sales team.”

TEAM held up well during the dip, falling 10% from 55 to about 50. It is holding the 50dma well, not all growth stocks could do that during this downturn.

IBD Growth ratings: #1 in its stock group, and pretty strong:
Composite Rating 97 Pass
EPS Rating 97 Pass
RS Rating 92 Pass
Group RS Rating B- Pass
SMR Rating A Pass
Acc/Dis Rating C Pass