How To Buy Shares In Atlassian

Atlassian marked its debut on the NASDAQ in 2015 under the ticker symbol TEAM. Initially, the shares traded below US$100 but only stayed there briefly. In the years following its IPO, Atlassian’s share price trended upwards strongly, reflecting the company’s growing influence and the increasing demand for its products. By 2021, the shares had soared to over US$450, underscoring Atlassian’s robust growth and market confidence.

However, like many tech companies, Atlassian wasn’t immune to market fluctuations. Following its peak, the share price experienced a downturn, reflecting a broader economic downturn following the COVID-19 pandemic.

At the start of 2023, the shares hit a 52-week low of US$116, a moment that now, in retrospect, appears to have been a lucrative buying point. Since then, Atlassian’s shares have shown a remarkable recovery, trending upwards and offering over 100% returns from their recent bottom. However, the journey over the past year was not without its setbacks.

In May, the share price fell abruptly following the release of its quarterly results. Investors interpreted the numbers as a sign of slowing growth for the company and a blowout in costs attributed to a company-wide restructuring that occurred earlier in the year.

A similar situation occurred in early November when the company announced results for the quarter ending September 30. Atlassian reported a 21% year-over-year increase in revenue, reaching $977.8 million, up from $807.4 million the previous year. However, despite beating expectations, this was the fifth consecutive quarter of slowing growth, which concerned investors and led to TEAM shares plummeting over 9%.

Yet, for keen observers and investors, each dip presented an opportunity.

As of December 26, 2023, Atlassian’s shares are valued at US$240.80 each, with the company boasting a market capitalisation of US$62.14 billion. This price history and the recent performance provide a compelling narrative for potential investors, illustrating a journey of growth, adaptation, and recovery.

A different research approach is essential when considering an investment in Atlassian, a company with innovative software solutions but negative earnings. Traditional metrics like the P/E ratio and dividends don’t apply, so investors must focus on alternative indicators and a broader understanding of the company’s industry position.

Key Financial Metrics to Consider

• Price-to-Sales Ratio (P/S): Measures how much investors are paying for each dollar of sales, crucial for understanding value in growth-focused companies. Atlassian’s current P/S ratio is around 17, which is below its long-term average of 24.7.
• Growth Metrics: Observe revenue growth, customer acquisition, and product adoption to assess Atlassian’s market potential and expansion. Recent quarterly results show that Atlassian has had 5 consecutive quarters of slowing growth, which should be considered when evaluating investing in TEAM shares.
• Burn Rate and Cash Runway: Evaluate financial stability through how long Atlassian can operate with its existing funds, indicating its ability to sustain operations without profits. Atlassian cash on hand for the quarter ending September 30 was US$2.238B, a 46.93% increase year-over-year.
• Balance Sheet and Cash Flows: A strong balance sheet with healthy cash reserves and controlled debt is vital. While Atlassian is technically loss-making on an earnings before interest and taxes (EBIT) level, it did generate almost US$1 billion in free cash flow in the past 12 months.

Economic and Industry Context

• Tech Trends and Macroeconomics: Stay informed about technological innovations, regulatory changes, and economic indicators like interest rates and investor sentiment, as these factors can significantly influence Atlassian’s performance and stock value.
• Industry Position and Trends: Understand Atlassian’s standing among competitors, market share, and how industry shifts in software demand could affect its growth.
• Innovation and Customer Base: Evaluate the company’s research and development investment and customer churn and retention rates. Continuous innovation and a loyal customer base are essential for long-term success.

Investing in Atlassian requires a nuanced understanding of non-traditional financial metrics, the company’s strategic market position, and the broader industry context. By focusing on these aspects, investors can make more informed decisions about the potential and risks of adding Atlassian to their portfolios.

Choosing the most suitable method to buy Atlassian shares—through a conventional broker or a digital share trading platform—depends on your investment style and needs. Here’s a more concise, benefit-driven breakdown of each option:

Conventional Broker

• Personalised Advice: Get investment strategies tailored to your financial goals and risk appetite.
• Expert Insights: Benefit from in-depth market research and analysis to inform your decisions.
• Hands-Off Trading: Rely on professionals to manage the complexities of trading and portfolio management.
• Premium Service: While generally more expensive, you pay for expertise and a personalised service.

Digital Share Trading Platform

• Trading on Your Terms: Enjoy the freedom to trade anytime, anywhere, with complete control over your investments.
• Cost-Effective: Save on fees compared to traditional brokers, keeping more of your investment gains.
• Tools at Your Fingertips: Access various analytical and educational resources to guide your trading decisions.
• Empowerment: Take charge of your investment choices, perfect for those who prefer a hands-on approach.

Related: Our Pick Of The Best Share Trading Platforms For Australians

Whether you prefer the personalised touch of a conventional broker or the autonomy and tools provided by a digital platform, choose the option that best aligns with your investment objectives, desired level of involvement, and budget. Both paths offer unique benefits, so consider what matters most to you in your investment journey.

Buying Atlassian shares, like any investment, requires careful planning and consideration. Here’s a step-by-step guide tailored to acquiring Atlassian shares, ensuring you’re well-informed and prepared throughout the process:

1. Research Thoroughly:
   Understand Atlassian’s current market position, financial performance, and future prospects. Analyse the factors discussed earlier, like financial health, industry trends, and competitive landscape.
2. Choose a Broker or Platform:
   Select a reliable broker or digital trading platform that provides access to the NASDAQ, where Atlassian is listed (ticker symbol: TEAM). Consider factors like fees, services, tools, and ease of use.
3. Create and Fund Your Account:
   Register with your chosen service and provide the necessary personal and financial information. Set up a method to fund your account, typically through a bank transfer or linking a credit/debit card.
4. Find Atlassian Shares:
   Use the search function on your platform to locate Atlassian shares. You can usually find them using the ticker symbol’ TEAM.’
5. Decide on the Investment Amount:
   Determine how many shares you want to purchase, considering your budget and how Atlassian fits your investment strategy.
6. Place Your Order:
   Choose between a market order (buy at the current price) or a limit order (set a maximum price you’re willing to pay). Review and confirm your order.
7. Monitor Your Shares:
   Keep an eye on your investment. Use tools your broker or platform provides to track performance and stay updated on company and market news.
8. Review and Adjust as Needed:
   The market changes, and so might your investment needs. Regularly review your Atlassian shares and your broader investment portfolio to ensure they align with your goals.
9. Stay Informed:
   Continue educating yourself about the market, Atlassian’s performance, and investment strategies. Knowledge is a powerful tool for making informed decisions.
10. Seek Advice When Needed:
    Consider consulting with financial advisors, especially for significant investments or if you need clarification on your investment strategy.

Purchasing shares is an exciting venture, but it also comes with risks. Make sure you’re comfortable with your understanding of the process and the investment itself. Remember, a well-informed investor is typically a more successful one.

Deciding to sell your Atlassian shares is as crucial as buying them, involving several key considerations to ensure they align with your overall investment strategy and financial goals.

Here’s what you should evaluate:

Revisit Your Investment Objectives
Reflect on why you initially invested in Atlassian. Whether for long-term growth, income, or diversification, assess if your shares still serve your current financial needs and goals. Consider asking yourself: “If I didn’t currently hold any Atlassian shares, would I choose to buy them now?” If your response leans towards no, it might indicate that selling could be the appropriate next step.

Consider Atlassian’s Performance
Regularly review Atlassian’s financial health, market position, and growth prospects. Consider any company outlook changes, industry trends, or competitive landscape that might influence its future performance.

Understand Tax Implications
Be aware of the tax consequences of selling your shares, especially regarding capital gains tax (CGT). If you’ve held the shares for over a year, you might be eligible for a 50% CGT discount in Australia. Consult a tax professional to understand the full impact.

Maintain an Objective View
Avoid making decisions based on emotions. Stay informed and objective, basing your decision on a thorough analysis of Atlassian’s prospects and how they align with your investment strategy.

Consider Market Conditions
Look at the broader economic and sector-specific trends that might impact Atlassian’s performance. Understanding these factors can help you decide the best time to sell your shares.

Seek Professional Advice
Consult a financial advisor if you’re uncertain or want a second opinion. They can offer personalised advice considering your financial situation and investment portfolio.

Plan for the Future
Consider what you’ll do with the proceeds if you sell. Having a strategy for reinvesting or reallocating these funds can help maintain the alignment with your financial objectives.

By carefully considering these factors when determining whether to sell shares, you can make a more informed and confident choice about the future of your investment in Atlassian.

Selling your Atlassian shares is a straightforward process, but it’s important to approach each step carefully. Here’s a simplified guide to help you through:

1. Review Your Position: Check your current Atlassian shares (TEAM) holdings in your investment account to know exactly how many shares you’re considering selling.
2. Decide the Amount to Sell: Based on your investment strategy and need for funds, decide how many shares you want to sell.
3. Choose Your Selling Strategy: Determine if you want to sell at the current market price (market order) or set a specific price you’re willing to sell (limit order).
4. Place Your Sell Order: Log into your brokerage account or trading platform, navigate to Atlassian’s stock (TEAM), and enter the details of your sell order.
5. Confirm and Monitor: Double-check the details of your order and confirm. Once submitted, monitor the order to ensure it’s executed correctly.
6. Review the Transaction: After the sale is complete, review the transaction details for accuracy and your records.

Remember, while selling shares is generally less complex than buying, it’s essential to consider the timing and reason for selling and any tax implications. If in doubt, consult a financial advisor for personalised advice.