Atlassian's Earnings Beat Lifts Slack and Other Cloud Software Stocks

Cloud-based work-collaboration stocks are poised to climb after one of their own, Atlassian, crushes analysts’ estimates in its fiscal second quarter.
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Cloud-based collaboration and productivity focused stocks were poised to climb on Friday after one of their own, Atlassian (TEAM) - Get Report, crushed analysts’ estimates in its fiscal second quarter, sending its stock sharply higher.

Atlassian, which makes cloud-based project management and workflow software, reported fiscal second-quarter profit of 37 cents a share, a full 10 cents ahead of Wall Street consensus forecasts.

Revenue was $408.7 million, up 37% from the year-ago quarter and ahead of analysts’ consensus expectations of $388 million.

The San Francisco-based company also guided higher for its fiscal third quarter, projecting revenue of between $395 million and $399 million, with adjusted profit of 20 cents a share.

The strong results pushed Atlassian shares up nearly 10% in premarket trading on Friday, lifting other cloud-based collaboration software companies higher in the process.

Atlassian was up 8.32% at $143.68 in Friday morning trading. Shares of Slack (WORK) - Get Report, Okta (OKTA) - Get Report, Workday (WDAY) - Get Report, ServiceNow (NOW) - Get Report and Salesforce.com (CRM) - Get Report were all higher as well.

Shares of Slack were up 1.79% at $21.60, while shares of Okta were up 2% at $130.40. Workday rose 1.55% to $187.24, Salesforce.com was up 0.85% at $185.61, and ServiceNow shares were also trading on the plus side. ServiceNow is scheduled to report earnings on Jan. 29.

To be sure, the entire cloud-based collaboration group is facing some tough competition from the granddaddy of all tech companies - Microsoft (MSFT) - Get Report - which hit a fresh record high Thursday after analysts at Wedbush paced Wall Street with a $195 price target.

Wedbush analyst Dan Ives said Microsoft's stronger-than-expected customer inflows from Azure, its business-focused cloud services offering, is in part what he and his colleagues see as a future revenue generator and winner for the company. 

Microsoft was up 0.31% at $167.24 in early trading on Friday.