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Yahoo
28 minutes ago
- Yahoo
Atlassian Corporation (TEAM): A Bull Case Theory
We came across a bullish thesis on Atlassian Corporation on Compounding Your Wealth's Substack by Sergey. In this article, we will summarize the bulls' thesis on TEAM. Atlassian Corporation's share was trading at $168.06 as of August 8th. TEAM's forward P/E was 39.53 according to Yahoo Finance. christina-wocintechchat-com-FVgECvTjlBQ-unsplash Atlassian delivered a strong Q2 2025 performance, reporting $1.38 billion in revenue, up 22.3% year-over-year and beating estimates by 2.2%. Subscription revenue surged 22.8% to $1.31 billion, driven largely by cloud growth, which reached $928 million, a 25.7% increase. The company sustained robust profitability with gross margins expanding 1.9 points to 85.3% and operating margins rising 4.6 points to 24.3%. Non-GAAP EPS of $0.98 surpassed expectations by 16.7%. Net new annual recurring revenue (ARR) soared 1,695.5% year-over-year to $159 million, supported by strong premium and enterprise edition upgrades, which grew 40%. Atlassian's AI features saw rapid adoption, with monthly active users climbing 50% quarter-over-quarter and token usage increasing fivefold, reinforcing AI as a key engagement driver embedded across its platform. The launch of Teamwork Collection, a bundled cloud suite, exceeded expectations with significant deployments at major automotive, semiconductor, and gaming firms. Enterprise sales gained momentum with a record number of $1 million+ ACV deals, more than doubling year-over-year, highlighting deepening penetration in large accounts. However, free cash flow (FCF) margin declined 10.5 points to 26%, and Q4 FCF fell 13% due to timing shifts in billing and collections, reflecting the transition to annual billing and multiyear deal linearity. Guidance for Q3 2025 revenue slightly missed estimates, reflecting caution around macro uncertainties and migration complexities in large enterprises. Despite these near-term headwinds, Atlassian reaffirmed its long-term targets of 20% CAGR revenue growth and 25%+ operating margins by FY2027, underpinned by continued investments in AI, cloud migration, and sales execution. Overall, Atlassian's results showcase durable growth, strong customer expansion, and a well-positioned product portfolio driving secular cloud adoption trends. Previously, we covered a on Atlassian Corporation by Deep Value Returns in May 2025, highlighting strong free cash flow and long-term growth targets. Since then, the stock has depreciated about 19% amid modest near-term growth. Sergey shares a similar view but emphasizes Q2 2025 results, AI adoption, and cloud growth, while noting some near-term cash flow challenges. Atlassian Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 82 hedge fund portfolios held TEAM at the end of the first quarter which was 75 in the previous quarter. While we acknowledge the potential of TEAM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None.
Yahoo
an hour ago
- Yahoo
Rapid7, Inc. (RPD): A Bull Case Theory
We came across a bullish thesis on Rapid7, Inc. on Value Investing subreddit by Useful-Strain-7088. In this article, we will summarize the bulls' thesis on RPD. Rapid7, Inc.'s share was trading at $19.82 as of August 7th. RPD's trailing and forward P/E were 48.76 and 10.78, respectively according to Yahoo Finance. Den Rise/ Rapid7 (RPD), a cybersecurity company specializing in vulnerability management and threat detection, is trading near its 52-week low around $20–22, creating what appears to be a mispriced opportunity. The market's pessimism—driven by decelerating ARR growth (+4% YoY in Q1), a high forward P/E (~58x), insider selling, and a lack of earlier catalysts—has overshadowed the company's improving fundamentals and emerging growth drivers. RPD serves ~11,700 customers with ~$71k in ARR per customer and is rolling out high-margin, AI-driven products like Incident Command (automated SIEM) and Active Patching (~99.93% success rate). These offerings, along with FedRAMP-certified InsightGovCloud, position RPD to capture federal cybersecurity spend. Despite recent top-line sluggishness, RPD boasts strong financials: $154M in free cash flow for 2024 (+83% YoY), $172M in operating cash flow, and ~70–74% gross margins (GAAP/non-GAAP). Activist investor Jana Partners (~5.8% stake) is pushing for board changes, increasing the likelihood of a strategic review or M&A activity. Valuation is compelling—RPD trades at just ~2.4x P/S versus Tenable (~5.2x), Qualys (~8.4x), and Palo Alto (~12x)—with a 13% FCF yield, rare in cybersecurity. If management executes on product growth and federal wins, the stock could re-rate significantly. Near-term catalysts include Q2 earnings (Aug 7), visibility at the Black Hat conference, and potential activist-driven board updates. With limited downside ($19 support) and upside potential of ~$40 (per DCF), RPD offers an asymmetric setup for long-term investors willing to tolerate near-term volatility. The combination of overlooked product momentum, improving financials, and activist pressure makes this a name to watch closely. Previously, we covered a on Qualys, Inc. by Na's Substack in May 2025, which highlighted its strong free cash flow, steady profitability, and expanding product suite. The company's stock price has appreciated by approximately 2.76% since our coverage. The thesis still stands as Qualys remains a stable cybersecurity leader. Useful-Strain-7088 shares a similar view on Rapid7, but emphasizes activist-driven upside. Rapid7, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held RPD at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the potential of RPD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Sign in to access your portfolio
Yahoo
2 hours ago
- Yahoo
Why Bloom Energy Rallied This Week
Key Points In an interview, Bloom Energy's CEO said there were deals with hyperscalers in the works. Bloom had already inked a milestone deal with Oracle back in July. A better-than-expected inflation print may also be helping. 10 stocks we like better than Bloom Energy › Shares of Bloom Energy (NYSE: BE) rallied this week, appreciating 27% as of 2:15 p.m. ET Friday, according to data from S&P Global Market Intelligence. There weren't any financial disclosures for Bloom this week, but CEO KR Sridhar did hold an interview with Bloomberg on Wednesday, during which he made very bullish comments on Bloom's future and the future of AI data centers. More hyperscaler deals in the pipeline? Bloom Energy's stock got a big lift in July, after fuel cells remained eligible for tax credits in the "One Big, Beautiful Bill" and the company inked a direct deal with Oracle to power its artificial intelligence (AI) data centers. Traditionally, Bloom Energy had made deals with data center real estate companies, power providers, and utilities. However, the Oracle deal may be paving the way for more direct deals with other cloud AI companies. Bloom's energy servers are based on fuel cells that can convert natural gas to electricity without combustion, making them a cleaner alternative than other forms of natural gas-based power. So, it's no surprise that with demand for electricity skyrocketing due to the AI data center buildout, Bloom is seeing renewed interest. Speaking with Bloomberg on Wednesday, Sridhar said, "You have seen the announcement with Oracle -- expect to see similar things coming soon." Apparently, hinting at more deals with cloud companies was enough to move the stock significantly higher. In addition to the Bloomberg interview, Bloom may also have benefited from the lower-than-expected inflation reading that came out on Tuesday. Following a lower-than-expected Consumer Price Index (CPI) report, economists have greatly increased their odds of a cut to the federal funds rate in September. Usually, interest rates are good for high-growth stocks trading at high multiples, so this could have helped this week's rally as well. Bloom Energy's rally has made the stock expensive Bloom currently trades around 6.5 times sales and 82 times this year's earnings estimates, so it's definitely not a cheap stock, especially for a company that basically sells hardware units. Nevertheless, the company currently finds itself in a fortuitous position amid the AI data center buildout. The question is whether the opportunity is as significant as the stock price suggests. Should you buy stock in Bloom Energy right now? Before you buy stock in Bloom Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bloom Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $663,630!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,115,695!* Now, it's worth noting Stock Advisor's total average return is 1,071% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 13, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool has a disclosure policy. Why Bloom Energy Rallied This Week was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
