Canaccord's David Hynes has adjusted his outlook on Atlassian (TEAM, Financial), reducing the stock's price target from $300 to $255 while maintaining a Buy rating. The adjustment follows Atlassian's latest Q3 performance, which aligned with top-line forecasts but did not surpass them, unlike previous quarters where the company typically outperformed revenue guidance by a few percentage points. Factors contributing to this change include postponed deals, challenges related to their data center, and seasonal influences.
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 30.80% from the current price of $229.07. 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 $320.61, suggesting a upside of 39.96% from the current price of $229.07. 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: May 01, 2025
- Total Revenue: $1.4 billion in Q3.
- Cloud Revenue Growth: 25% year-over-year.
- Free Cash Flow Margin: 47% for the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Atlassian Corp (TEAM, Financial) reported total revenue of $1.4 billion in Q3, driven by a 25% year-over-year growth in cloud revenue.
- The company achieved a free cash flow margin of 47% for the quarter, indicating strong financial health.
- Atlassian Corp (TEAM) has over 1.5 million monthly active users of AI across its platform, showcasing significant adoption of its AI capabilities.
- The company achieved FedRAMP moderate authorization for its US federal government customers, expanding its cloud platform with the Atlassian Government Cloud.
- Atlassian Corp (TEAM) continues to make progress in its strategic priorities, including advancements in AI and connecting technology and business teams through its platform.
Negative Points
- Enterprise deals landed later than expected in the quarter, impacting Q3 cloud revenue growth.
- The company is experiencing elongated deal cycles due to larger, more complex deals, which could affect future revenue timing.
- There is investor confusion regarding the impact of data center duration changes on revenue growth.
- The transition to a new Chief Revenue Officer (CRO) could potentially impact the go-to-market strategy and execution.
- The company faces challenges in balancing growth and capital usage, particularly with the integration of AI capabilities like Rovo.
