The story behind Atlassian’s 81% YTD share price growth

September 21, 2021

2021 has been an incredible year for Atlassian–following the announcement of Q4 earnings on July 29th shares in Atlassian have soared through the roof hitting a high (at the time of writing) of $405 (Figure 1).  In the space of as little as six weeks the stock jumped $125 on the back of a strong quarter’s results.  What we’re going to explain is that this is truly encouraging for customers – because this is a huge growth stock with a massive increase in customers on an already massive scale. Its clear that when it comes to customers Atlassian is hitting it out of the park. 

Atlassian 2021 stock growth

Figure 1: Atlassian 2021 Stock Growth

Atlassian had a relatively “up and down”  start to the year from January to April (Figure 2) with Q3 earnings on April 29th just about hitting estimates. There were positive signs, however, with subscription revenue (Atlassian’s main revenue driver) up 43% year-over year with cloud up 35% and DC up 75%. Meanwhile, Atlassian’s cloud shift began to see serious results with cloud migrations doubling in Q3 versus Q3 2020.

Atlassian stock price Jan - Apr

Figure 2: Atlassian Stock Price (January – April)

However, leading into and following Q4 earnings announcements is when things really took off for Atlassian (Figure 3). The day after Atlassian’s Q4 earnings report Atlassian’s stock price rocketed from $266 to $325, an incredible 22% increase in just one day. Q4 earnings shattered expectations with subscription revenue up 50% year-over-year with cloud up 47% and DC up 63%. Atlassian also reached some key milestones including breaking the 200,000 customer threshold and revenues topping $2bn.

Atlassian stock price apr - aug

Figure 3: Atlassian Stock Price (April – August)

Since then the good news hasn’t let up for Atlassian. Atlassian was named a “Leader” in the 2021 Gartner Magic Quadrant for Enterprise Agile Planning Tools, a “Visionary” in the 2021 Gartner Magic Quadrant for IT service management tools, while the share price has continued its mesmeric rise (this week breaking over $400–Figure 4)). This week, for the first time, Atlassian can call itself a $100bn corporation–a major milestone, not bad for a company that started “in a Sydney garage on a $10,000 credit card debt“.

Atlassian stock price aug - sept

Figure 4: Atlassian Stock Price (August – September)

It’s very important to note that Atlassian’s stock growth is being driven by its growing popularity as more and more organizations recognize the incredible value there is to be gained from incorporating Atlassian products into all spheres of business operations. This is in contrast to competitors like ServiceNow who, with customer growth far below that of Atlassian, are more inclined to squeeze existing customers. Atlassian’s Q4 customer growth was a whopping 23,311 (11%) compared to ServiceNow’s of 175 (2%).

Furthermore, Atlassian’s wonderful year can be put into perspective when compared to the less impressive years that two of its major competitors have had. ServiceNow (Figure 5) and Workday (Figure 6) have both had modest 2021s with share prices up 28% and 22% respectively, however, investors have clearly begun to recognize Atlassian as the party with the most growth potential and most likely to fulfill its potential as its share price shows no signs of letting up on its 81% yearly growth rate.

Atlassian vs Service Now stock price change 2021

Figure 5: Atlassian vs ServiceNow Stock Price 2021

Atlassian vs workday stock price 2021

Figure 6: Atlassian vs Workday Stock Price 2021

As Atlassian Platinum Partners we’re delighted to be a part of this thriving and growing enterprise set of solutions. As Atlassian expands more and more,  users will come to know how useful and in how many ways Atlassian’s tools can be utilized for business productivity and success. We truly believe in Atlassian’s products and believe we have unique ways of harnessing them for the success of our customers, including MARS and Synthesis.

If you have any questions feel free to reach out to us at hello@blendedperspectives.com.

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