Key insights
- Atlassian, Twilio, and Five9 are rallying after reporting better-than-expected earnings, boosting the software sector. Atlassian leads with a 21.9% premarket surge. Twilio raised its full-year revenue growth outlook. Five9 highlighted strong AI revenue growth. Analyst upgrades and target price increases followed, indicating positive sentiment and potential for continued gains in these stocks and the broader software sector.
Investing.com -- Atlassian (NASDAQ: TEAM), Twilio (NYSE: TWLO) and Five9 (NASDAQ: FIVN) are surging in premarket trading on Friday after all three companies reported better-than-expected earnings after Thursday’s close, offering a boost to a software sector that has been under pressure.
Atlassian is leading the move, up 21.9% premarket, after reporting fiscal third-quarter earnings per share of $1.75, beating estimates by $0.77, on revenue of $1.79 billion versus the $1.57 billion consensus.
Barclays said the results should draw fresh interest to the stock. "Expectations were low for the whole software space and particularly for TEAM given the recent weakness in shares. These results will likely invite more investors to revisit the name," the bank said.
BMO Capital analyst Keith Bachman maintained an Outperform rating while trimming his price target to $105 from $130 following the results.
Twilio is up 18.4% premarket after posting first-quarter EPS of $1.50, $0.23 ahead of estimates, on revenue of $1.41 billion versus the $1.34 billion consensus.
The company raised its full-year reported revenue growth outlook to 14%–15% from 11.5%–12.5% previously.
Bank of America analyst Koji Ikeda raised his price target on the stock to $225 from $190, maintaining a Buy rating, citing gross profit dollar growth accelerating to 16% year over year from 10% in the fourth quarter.
Five9 is up 16.4% premarket after reporting first-quarter EPS of $0.76, beating estimates by $0.08, on revenue of $305.3 million versus the $299.9 million consensus.
Needham analyst Scott Berg reiterated a Buy rating, highlighting AI revenues growing 82% year over year and a reversal in the company's long-term dollar-based retention rate trend.