What happened
Shares of workplace-collaboration software company Atlassian (TEAM -7.11%) jumped on Wednesday after an analyst boosted his price target for the stock. As of 2:30 p.m. ET, Atlassian stock was up 5% -- notable considering the S&P 500 was down almost half of a percentage point.
So what
Wells Fargo analyst Michael Turrin has long believed that Atlassian stock is a buy. However, the analyst updated his price target for Atlassian stock, raising it from $180 per share to $200 per share, according to TipRanks. This represents about 12% additional upside from where the stock traded as of this writing.
Before you get too excited, I'd be remiss not to mention that Turrin already changed his price target for Atlassian stock earlier this month. According to StreetInsider, the analyst lowered his price target from $200 per share to $180 per share on May 5. Therefore, today's action merely reverses his decision from just a few weeks ago.
Now what
There's tons of financial news out there, and much of it is just noise. And I believe that's the case again today. Often, analysts adjust price targets based on what the stock price is already doing. For example, Atlassian stock fell about 14% in April, and Turrin's price target was lowered shortly thereafter. In May, Atlassian stock was up about 14% before today's jump, and Turrin's price target was consequently raised today.
This is why it's better to track business fundamentals than get caught up in the stock price movements.
In Atlassian's case, its growth has slowed significantly due to macroeconomic conditions. However, its overall customer count is still increasing, which gives hope that its growth can rebound when economic conditions lead to higher spending from businesses.
