No qualifying author-owned investment thesis was confirmed in this post.
The author explicitly asks a question about whether the stock is a buy rather than expressing their own directional investment judgment.
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Atlassian is currently trading around $92.
In September 2018, nearly 7.5 years ago, it closed at $96.
Looking at its financials, we can compare between September 2018 to the latest earnings last week:
- 6x revenue (~$1B to ~$5.8B)
- 5x cash flow (~$280M to ~$1.4B)
- 5x employee headcount (~2,700 to ~13,800)
Atlassian actually maintained its revenue-per-employee efficiency reasonably well during this massive scaling phase.
However, while they are a cash flow machine, their GAAP Net Income has actually worsened:
- 2018: $119M Loss
- Today: $189M Loss
Means its net loss is now even greater than 7 years ago.
Its Price-to-Sales (P/S) ratio has shrunk from ~24x to ~4.3x (-82%).
It seems investors in 2018 paid ~24x sales for "future growth," and while the company delivered the growth, the multiple has compressed to ~4.3x.
With the valuation reset, is this finally a buy for the potential upside?