Key Stats for Atlassian Stock
- This-Week Performance: -20%
- 52-Week Range: $89 to $324
- Valuation Model Target Price: $179
- Implied Upside: 97%
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What Happened?
Atlassian Corporation stock fell about 20% this week, ending near $91 per share, as selling pressure intensified following insider transactions and a broad reset in analyst price targets. The decline continued even after a strong earnings report, with investors focusing on valuation, insider activity, and near-term margin pressure rather than headline growth.
The stock moved lower this week primarily due to founder-led insider selling, which weighed on sentiment despite solid operating results.
CEO Michael Cannon-Brookes and co-founder Scott Farquhar each sold 7,665 shares at $94.81, generating roughly $726,719 per transaction and reducing their stakes by about 2.7%.
Farquhar completed ten consecutive sales of the same share block between January 12 and February 6, while Cannon-Brookes has executed multiple identical sales in recent weeks, keeping investor attention squarely on insider activity.
The selling followed Atlassian’s Q2 earnings update this week, which highlighted strong cloud and AI momentum. Cannon-Brookes said the company delivered its first $1 billion cloud revenue quarter, adding that “AI is the best thing to happen to Atlassian.”
Analyst actions added to the volatility this week. Guggenheim cut its price target to $190 from $225 while maintaining a Buy rating, BTIG lowered its target to $140 from $220, and Mizuho trimmed its target to $205 from $225 with an Outperform rating.
Morgan Stanley reduced its target to $290 from $320 but kept an Overweight rating, highlighting wide dispersion across analyst views despite ongoing confidence in Atlassian’s long-term cloud and AI strategy.
Institutional positioning was mixed this week. Federated Hermes cut its stake by 96.5%, selling 71,202 shares and retaining just 2,558 shares worth about $409,000, reinforcing near-term caution.
That selling was partially offset by Bessemer Group, which increased its position by 6.5% to 275,640 shares valued near $44 million, while overall institutional ownership remains high at roughly 94.45%, suggesting longer-term conviction remains intact despite this week’s sell-off.
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Is Atlassian Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 18.8%
- Operating Margins: 26.5%
- Exit P/E Multiple: 24x
Revenue growth remains supported by Atlassian’s continued transition toward cloud subscriptions, where enterprise adoption, seat expansion, and bundled product usage drive sustained top-line momentum rather than one-time upgrades.
The shift toward cloud also improves revenue visibility through longer contract durations and higher retention across large customers.
Margin expansion is increasingly tied to scale benefits rather than cost cuts. Cloud infrastructure efficiency, improved billing leverage, and AI-powered features embedded across Jira, Confluence, and Service Management increase customer value without proportional increases in operating costs, supporting gradual but durable margin improvement.
This supports the view that future returns depend less on accelerating headline growth and more on execution across enterprise cloud migrations, AI monetization, and expanding usage within existing customers rather than short-term sentiment shifts.
Based on these inputs, the valuation model estimates a target price of about $179 per share, implying roughly 97% total upside from current levels over the next few years, indicating the stock appears undervalued at current prices.
Results over the next 12 months hinge on continued progress in large-enterprise cloud deals, monetization of AI features across Atlassian’s core products, and sustained seat expansion across both technical and non-technical teams.
These drivers determine how effectively strong revenue growth translates into operating leverage.
At current levels, Atlassian Corporation appears undervalued, with future performance shaped by cloud execution, AI-led monetization, and improving margin durability rather than a rebound in short-term sentiment.
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