Why Did Atlassian Stock Drop 12% in April

Core Insights - Atlassian's shares fell 11.7% last month due to growth concerns and the departure of a key executive [1] - The company reported a 30% revenue growth and a 41% increase in subscription revenue, leading to a 59% growth in free cash flow, reaching $555 million [2] - Despite strong headline figures, analysts expressed concerns about sustainable growth, particularly in the cloud segment, which is expected to grow at 25$555 million, reflecting robust financial health [2] - Adjusted earnings per share (EPS) exceeded Wall Street consensus by approximately 20% [2] Growth Concerns - Analysts are worried about the sustainability of growth, especially in the cloud segment, which is crucial for future plans [3] - The data center segment's strong performance is not expected to be sustainable, raising concerns about future revenue [3] - The anticipated slowdown in cloud growth is significant as it constitutes about 60% of total revenue [3] Leadership Changes - Scott Farquhar's departure introduces uncertainty, although he will remain on the board [4] - The transition in leadership is viewed as relatively minor given the presence of another co-CEO [4] Valuation Metrics - The stock's high valuation ratios make it challenging for investors to remain optimistic amid uncertainty [4][5] - The valuation ratios, while not prohibitively expensive, have become a concern following the recent news [5]