In this clip from “3 Minute Stocks Updates” on Motley Fool Live, recorded January 5, Motley Fool contributors Brian Withers and Toby Bordelon discuss why Atlassian (NASDAQ: TEAM) has surpassed other SaaS competitors and is considering whether it can continue to do so.
Brian Withers: Atlassian. TEAM is the ticker. They were just named the leader of Forrester (NASDAQ: FORR) for its enterprise service management tools. These tools are in the same zone as Service Today (NYSE: NOW). ServiceNow is also in the leader zone. ServiceNow is actually established and dedicated to this product and customer range. This is good news for Atlassian shareholders and a recognition that its move into the IT service management space is paying off. At its investor meeting over the past year, the company laid out three pillars focused on, first, agile development tools for software engineers, which is where the company started. Job management and called it for everyone, for non -technological and technical, and the management of this IT service, which is a natural extension of its work in software engineering teams. Today, 35,000 customers rely on Jira’s service management for their product support needs. A quote from the press release, “Atlassian received the highest possible scores on 18 of 22 evaluation criteria. The report lists the usability ecosystem integrations of Atlassian Suite as its greatest strength, citing Atlassian is suitable for organizations seeking a comprehensive integrated service management platform to integrate development, operations, and business groups. ” I love that this company’s products are recognized as exceptional, especially in this new area for growth.
Toby Bordelon: Brian, I looked at the stock chart last year. Atlassian isn’t as much crushed as some of the other SaaS companies. The stock is definitely losing over time, but it’s not as much as you might think because of the darkness and ruin we hear about tech companies, SaaS, and general financial media. My question to you is, what is the difference of Atlassian and why has it gotten better? Can it continue to do so?
withered: That’s a great insight, Toby. The stock has actually risen if you look at the last 12 months 41%, but it has also dropped at other tech companies, 25% from its high. I think it’s different because of the wide range of products. For example, it competes with Asana (NYSE: ASAN) for job management. It competes with ServiceNow in IT service management, and it competes with tools like JFrog (NASDAQ: FROG) for code release. Why have three different companies with three different focuses if you can integrate, as a customer, all of these street functions using Atlassian tools? In fact, Forrester acknowledged this in their report and said, Atlassian’s strategy is centered on a comprehensive digital product pipeline along with an effective terrain and expansion of the customer acquisition model. This approach receives the strongest marks in this review. That’s what I really like about it, the umbrella of services and products.
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