Key Stats for Atlassian Stock
- This week’s performance: -14%
- 52-week range: $140 to $326
- Valuation model target price: $252
- Implied upside: 72% over 2.5 years
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What Happened?
Shares of collaboration software company Atlassian (TEAM) fell about 14% since Friday, with the move largely tied to an analyst update rather than any change in business fundamentals.
During the week, an analyst at Macquarie lowered Atlassian’s price target to $240 from $250. While the firm maintained its Outperform rating, the modest reduction signaled slightly less near-term upside, which weighed on sentiment given the stock’s valuation sensitivity.
At the same time, Atlassian recently appointed Anil Sabharwal, a longtime Google product executive and former technical advisor to the company, to its board of directors. Sabharwal previously led products like Google Photos, Chrome, and Google Drive, bringing deep experience in building and scaling category-defining software platforms.
Importantly, there were no changes to guidance, demand trends, or product outlook during the week. The pullback reflects how the market is recalibrating expectations rather than any deterioration in Atlassian’s underlying business.
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Is Atlassian Stock Undervalued?
Under valuation model assumptions realized through mid-2028, the stock is modeled using:
- Revenue growth (CAGR): 19.0%
- Operating margins: 26.2%
- Exit P/E multiple: 33.0x
Based on these inputs, the model estimates a target price of $252, implying 72% total upside from the current share price and a 24.5% annualized return over the next 2.5 years.
Business execution remains the key driver behind those assumptions. Cloud seat expansion continues to matter most, especially as Atlassian works through migrations from legacy server products and free tiers into paid cloud plans.
Growth quality is closely tied to enterprise customer expansion, since large accounts contribute a disproportionate share of net revenue retention and have an outsized impact on revenue trends.
Margins hinge on cloud gross margin improvement and operating discipline, where scale benefits can translate quickly into higher profitability given Atlassian’s relatively fixed cost base.
Product adoption also plays a role, as Jira Service Management and AI-enabled tools like Rovo create opportunities to increase spend per customer if usage broadens across larger organizations.
If these operational drivers hold, the current valuation reflects execution risk rather than optimism, which explains why the stock can remain volatile even as the long-term thesis stays intact.
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