Atlassian Corp (NASDAQ:TEAM) was started in Australia by two 18-year-olds that had a very interesting idea. As computer programmers, they wanted to see if they could make coding more collaborative and efficient. That was in 1998. By 2005, they had signed their 1,000th customer. In 2015, the company went public. Over this just more than three-year run, TEAM stock has gained 310%, which is a pretty solid growth track.
In the past 12 months, even during all the tech destruction, TEAM stock is up 96%.
That tells us a couple important things.
What to Know About TEAM Stock
First, this isn’t considered a tech stock as much as it is a productivity stock. All the brands that TEAM has built or acquired — and continues to acquire — are built to help make code development and the technical aspects of managing software development more creative, productive and efficient.
That also means it can flourish when overall economic growth is slow, since it’s a productivity booster. And it will flourish when times are good because it can help companies efficiently scale up when they’re adding customers, products and people to their operations.
Second, because it is a fundamentally a tech stock — a company that supports tech workers in various sectors — it will benefit from the tech boom as well. This is best reflected in the reality that tech fund managers will certainly hold some TEAM stock simply because it offers some diversity in the sector and has a unique niche.
Since late July last year when TEAM decided to give up on its broader aspirations to compete with Slack and Microsoft (NASDAQ:MSFT) in broader productivity and messaging tools by selling its Hipchat and Stride tools to Slack, it has focused on its niche with over $500 million in new acquisitions. Analysts loved the fact that TEAM realized it was better to step aside from this sector with a piece of the action rather than try to fight for market share with two heavyweights outside its core market. And analysts have continued to like the fact that TEAM has made some great acquisitions that expand its brand into a vibrant and growing sector.
My Portfolio Grader has TEAM as an A-rated stock at this point for these very reasons.
Now, there’s no doubt that Wall Street loves young, growing tech companies, which is why this firm has a market cap of $26 billion. But what TEAM has demonstrated is that it knows how to grow and how to differentiate its offerings so that it can compete with its core competencies.
There are plenty of big productivity software companies out there looking to dominate the enterprise sector and smaller business sectors. But their offerings usually cater more toward sales and marketing rather than programming and coding.
And as long as technology continues to play such a significant role in our work and leisure, TEAM has a powerful opportunity for growth and profit.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
