Piper Sandler has revised its price target for Atlassian (TEAM, Financial), lowering it from $365 to $300, while maintaining an Overweight rating on the shares. The adjustment comes after the company's third-quarter results showed a smaller-than-expected success, influenced by factors such as linearity and duration. This outcome has led to persistent concerns about the macroeconomic environment, prompting Atlassian to maintain its guidance for the fourth quarter. Despite these challenges, Piper Sandler remains optimistic about Atlassian's potential to achieve a compound annual growth rate exceeding 20% through fiscal year 2027.
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.
