Motley Fool’s 5 High Growth Stock Picks

3. Atlassian Corporation (NASDAQ:TEAM)

3-year Revenue Growth: 73.6%

Atlassian Corporation (NASDAQ:TEAM) was founded in 2002 and is headquartered in Sydney, Australia. The company designs, develops, and licenses software products worldwide. Its products include Jira Software, Jira Work Management, Jira Service Management, Jira Align, Opsgenie, Confluence, Trello, Bitbucket, Bamboo, Crowd, Crucible, Fisheye, Halp, Sourcetree, and Statuspage. Atlassian Corporation (NASDAQ:TEAM) was a new arrival in Motley Fool’s Q4 portfolio, with the hedge fund acquiring 79,368 shares worth $10.2 million. 

The company beat its top and bottom line estimates on FQ2 results and expects a FY 2023 topline growth of 25%. The board also authorized a buyback of $1 billion in common stock. It is one of the top high growth stock picks of Motley Fool. 

On February 3, David Hynes, an analyst at Canaccord, increased the target price on Atlassian Corporation (NASDAQ:TEAM) stock from $150 to $175 and maintained a Buy rating. The analyst indicated that he would purchase shares if the stock price weakened, as he perceives the recent guidance cut as a more precautionary measure compared to the previous one.

According to Insider Monkey’s fourth quarter database, 50 hedge funds were long Atlassian Corporation (NASDAQ:TEAM), compared to 58 funds in the prior quarter. Alexander Becker’s Codex Capital is a prominent stakeholder of the company, with a position worth $345,050. 

Artisan Partners made the following comment about Atlassian Corporation (NASDAQ:TEAM) in its Q4 2022 investor letter:

“Among our bottom contributors were Atlassian Corporation (NASDAQ:TEAM), SVB Financial Group and Catalent. The tougher macro environment caught up with Atlassian in the quarter as the company is seeing slower software user additions as customers of all sizes moderate hiring and spending. However, the company still expects to grow sales at a mid-20s rate in Q4 and grow its strategically important cloud revenues 40%–45%. These are slower rates than we expected, and could slow further, but Atlassian’s growth metrics remain solid in light of the environment. In the short term, slower revenue growth will likely pressure margins and profitability given the company’s rapid hiring expansion in recent periods. But we detect a meaningful shift in tone from management on expense growth and margins now that top-line growth is slowing. While we fully expect Atlassian to keep investing in its large growth opportunities, we think a prudent reprioritization of this spending will lead to margin tailwinds in the medium term. We are sensitive to the slowing near-term growth dynamics but believe remaining invested is appropriate given the longer term profit growth potential.”