Key Takeaways
- Atlassian shares fell 12% today after it guided to about 13.75% revenue growth for fiscal 2027, against 24% last quarter.
- Much of that slowdown comes from Atlassian’s planned Data Center wind-down, so the selloff looks overdone.
- Reports from monday.com and Salesforce will show whether seat-based software is slowing broadly.
- The stock traded at 33x forward earnings before the drop, against a five-year average of 81x.
Atlassian (TEAM) beat Wall Street’s earnings estimate for its fiscal first quarter, and its stock still fell 12% today. Investors looked past it to a full-year guide calling for barely half the quarter’s growth.
Next up are work-management rival monday.com (MNDY), reporting early next week, and Salesforce (CRM), which pitches AI agents to the same big companies and reports in early December.
The quarter was the easy part
Revenue rose 24% to $1.77 billion in the quarter ended Sept. 30, and adjusted EPS of $1.65 beat the $1.44 consensus. CEO Mike Cannon-Brookes went further: “Enterprise AI has hit an inflection point.”
But for the year ending June 2027, Atlassian guides to about 13.75% revenue growth.
Analysts already expected about that pace going in:
So I don’t expect the estimates to move much.
A slowdown Atlassian chose
Atlassian stopped selling Data Center software to new customers in March, and plans to retire it in March 2029. So Atlassian expects Data Center revenue to fall about 16% for the year, with Cloud up about 26%. I suspect that explains much of the slowdown.
It’s not just Atlassian
monday.com was already slowing: it guided to 16% to 17% revenue growth for the September quarter, from 22% in the June quarter. If its 109% net dollar retention holds next week, I’d put Atlassian’s slowdown down to its Data Center switch.
Salesforce’s Agentforce ARR passed $1.5 billion at July 31, up more than 240%, yet it guides to just 11% to 12% revenue growth this fiscal year. Its December report will show whether AI agents are adding to growth for seat-priced software yet.
TIKR tracks 33 analysts on Atlassian. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Atlassian, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Atlassian’s Analyst Ratings
Too cheap for a 26% grower
Atlassian traded at 33x forward earnings at Thursday’s close, far below its five-year average of 81x:
At today’s price, it’s closer to 28x, though still well above April’s low of 11x.
A business growing Cloud 26% and producing $463 million of free cash flow last quarter looks cheap to me at that price.
Of course, Cloud is guided to slow from 31% growth to about 27% next quarter. If it slips below that when Atlassian reports early next year, the market will have been right to worry.
So what is Atlassian stock actually worth?
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