Analyst David Hynes from Canaccord has revised the price target for Atlassian (TEAM, Financial) down to $300 from the previous target of $375, maintaining a Buy rating for the stock. This adjustment comes as the company approaches its fiscal third quarter, a period impacted by the anniversary of last year’s acquisition of Loom, which is expected to exert downward pressure on growth rates. Despite this, Atlassian has implemented price hikes in February, and there is optimism around its future potential in monetizing AI products and platforms.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for Atlassian Corp (TEAM, Financial) is $299.63 with a high estimate of $420.00 and a low estimate of $225.00. The average target implies an upside of 31.13% from the current price of $228.49. More detailed estimate data can be found on the Atlassian Corp (TEAM) Forecast page.
Based on the consensus recommendation from 32 brokerage firms, Atlassian Corp's (TEAM, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Atlassian Corp (TEAM, Financial) in one year is $316.06, suggesting a upside of 38.33% from the current price of $228.49. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Atlassian Corp (TEAM) Summary page.
TEAM Key Business Developments
Release Date: January 30, 2025
- Annual Run Rate Revenue: Exceeded $5 billion.
- Subscription Revenue Growth: Increased by 30% year over year.
- AI Interactions: Increased more than 25x year over year.
- Sales to Higher Value SKUs: Up over 40% year over year.
- Deals Greater Than $1 Million: Record number signed during the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Atlassian Corp (TEAM, Financial) achieved over $5 billion in annual run rate revenue, with subscription revenue growing 30% year over year.
- The company reported a record number of deals greater than $1 million in annual contract value, indicating strong enterprise adoption.
- AI features have seen a significant increase in interactions, growing more than 25x year over year, enhancing customer workflows and collaboration.
- Sales of premium and enterprise editions increased by over 40% year over year, driven by AI, automation, and analytics capabilities.
- Atlassian's cloud platform is well-positioned to connect technology and business teams across the Fortune 500, with significant customer wins in Q2.
Negative Points
- Despite strong enterprise performance, only 10% of Atlassian's revenue is driven by large customers, indicating potential under-penetration in this segment.
- The company faces execution risks related to the evolution and transformation of its enterprise go-to-market strategy.
- There is ongoing uncertainty in the macroeconomic environment, which could impact future financial performance.
- Data center revenue growth is expected to be challenging due to prior year comparables related to server end of support and pricing changes.
- Operating margins in the second half of the fiscal year are expected to be slightly lower due to increased investments in sales, marketing, and R&D.
