Why Are Atlassian Shares Trading Higher Premarket?

Piper Sandler analyst James Fish lowered the firm's price target on Atlassian Corporation PLC TEAM to $414 from $472 and reiterated an Overweight rating on the shares. The price target implies an upside of 42.3%.
The analyst says the company's fiscal Q2 was another strong quarter with 8% subscription upside, out-performance across all product categories, and billings re-accelerating.
He dropped the price target on lower comps but believes the tech pullback provides "an opportunity for a highly sought after name."
Atlassian reported second-quarter FY22 revenue growth of 37% year-on-year to $688.5 million, above the consensus of $641.3 million.
Non-IFRS EPS of $0.50 beat the consensus of $0.39. Non-IFRS operating margin contracted 300 bps to 26%.
Atlassian sees Q3 revenue of $690 million - $705 million, above the consensus of $663 million. It sees non-IFRS EPS of $0.29 - $0.31, below the consensus of $0.40.
"Q2 was another strong quarter for Atlassian with over 10,000 net new customers this quarter, 98% of which were in the Cloud," said Scott Farquhar, Atlassian's co-founder, and co-CEO. "We also saw subscription revenue grow 64% year-over-year, which reflects our continued investment in our Cloud platform and the strong focus and effort we have put into helping our customers seamlessly move to Cloud."
Price Action: TEAM shares traded higher by 9.32% at $318 in the premarket session on the last check Friday.