Investing can be hard but the potential fo an individual stock to pay off big time inspires us. But when you hold the right stock for the right time period, the rewards can be truly huge. One bright shining star stock has been Atlassian Corporation Plc ( NASDAQ:TEAM ), which is 359% higher than three years ago. On top of that, the share price is up 32% in about a quarter.
Because Atlassian is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years Atlassian has grown its revenue at 32% annually. That’s much better than most loss-making companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 66% per year, over the same period. Despite the strong run, top performers like Atlassian have been known to go on winning for decades. In fact, it might be time to put it on your watchlist, if you’re not already familiar with the stock.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
It’s probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
Pleasingly, Atlassian’s total shareholder return last year was 85%. That gain actually surpasses the 66% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Atlassian better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.