Atlassian Q4 results may top estimates, but guidance is key: Baird
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Collaboration software maker Atlassian (NASDAQ:TEAM) is slated to report fiscal fourth-quarter results on August 3 and investment firm Baird is expecting strong results, but commentary on fiscal 2024 will be key.
Analyst Rob Oliver, who has an outperform rating on Atlassian (TEAM) shares, said recent investor interest has "picked up," which could be indicative of strong results. 
"While some of this outperformance has likely been driven by general strength across fast-growth software, we believe sentiment likely hit trough this quarter," Oliver wrote in an investor note. "More recently, investor interest has picked up, with the most common questions/concerns around: model transition visibility; competitive landscape; and FY24 guidance expectations."
Oliver, who also boosted his per-share price target to $205 from $175 on Atlassian (TEAM), noted that the company's revenue guidance called for sales to be between $900M and $920M, with cloud-related guidance showing between 26% and 28% year-over-year growth. 
"[W]e believe management took a prudent approach to guidance, which assumes increasing macro impacts on seat expansion and free-to-paid conversions as well as headwinds in areas Atlassian has yet to see significant impacts (churn, up-sell)," Oliver added.
Looking ahead to fiscal 2024, Atlassian (TEAM) is expected to generate $4.251B in revenue, up 20% year-over-year, including a 31% rise in subscription revenue growth. It's likely that Atlassian's management will have a "conservative approach" for guidance, given the uncertainty surrounding its transition to cloud computing.
Additionally, Oliver expects the company's operating margin could be in the mid-to-high teens as the company reinvests savings from its recent restructurings.
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