Atlassian Earnings: Selloff After Solid Quarter Offers a Buying Opportunity

We are maintaining our fair value estimate of $215 per share for narrow-moat Atlassian after the company reported good results for its fiscal first quarter coupled with solid guidance for the second quarter. With shares selling off after hours we see a buying opportunity. Our model changes are minor and we struggle to uncover a supportable rationale for the selloff. Demand trends remain healthy overall and are showing signs of improvement as the company reported better-than-expected revenue and much-better-than-expected profitability. Guidance calls for solid revenue growth and good operating margins. Overall, results support our long-term thesis on a quality growth company.