Key Takeaways:
- Atlassian shares have fallen sharply as software stocks reset lower on AI disruption fears, margin concerns, and slower multiple expansion.
- TEAM stock could reasonably reach $102 per share by mid-2028, based on our valuation assumptions.
- This implies a 37.3% total return from today’s price of $74, with an annualized return of 15.5% over the next 2.2 years.
What Happened?
Atlassian (TEAM) remains in focus this week after Reuters reported the company expanded its Google Cloud partnership to deepen integrations between Rovo and Google’s Gemini AI tools. That matters because Atlassian is trying to embed AI across its collaboration suite. Investors want proof that AI can drive pricing power and stronger customer adoption.
The stock has also been pressured by broader software weakness. Reuters reported U.S. software stocks sold off in April as renewed AI disruption concerns hit the sector. Investors appear concerned that fast-moving AI platforms could pressure traditional software pricing models.
Atlassian also announced in March that it would lay off about 10% of its workforce. Cost cuts can support margins, but they can also signal management is adapting to a more competitive environment. Markets often debate whether layoffs are defensive or strategic.
The next major catalyst is earnings. Atlassian is scheduled to report fiscal Q3 2026 results on April 30, followed by an Analyst/Investor Day in May. Strong guidance, cloud growth, or AI monetization progress could matter more than headline revenue alone.
Here’s why Atlassian stock could move sharply next: investors want to see whether growth software names can pair AI innovation with improving profitability.
What the Model Says for TEAM Stock
We analyzed the upside potential for Atlassian stock using valuation assumptions based on its strong enterprise software position, recurring subscription revenue, expanding AI products, and durable free cash flow generation.
Based on estimates of 19% annual revenue growth, 25% operating margins, and a normalized 14.5x P/E multiple, the model projects Atlassian stock could rise from $74 to $102 per share.
That would be a 37.3% total return, or a 15.5% annualized return over the next 2.2 years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for TEAM stock:
1. Revenue Growth: 19%
Atlassian has remained a strong top-line grower. Total revenue increased from $4.36 billion in fiscal 2024 to $5.22 billion in fiscal 2025. LTM revenue reached about $5.76 billion.
The company’s products remain widely used by software, IT, and enterprise teams. Jira helps manage projects, while Confluence supports documentation and collaboration. Those tools can expand inside existing customers over time.
Based on analysts’ consensus estimates, we used a 19% forecast, reflecting continued cloud adoption, cross-selling, and AI product monetization, balanced against a slower enterprise spending environment.
2. Operating Margins: 25%
Atlassian’s current GAAP operating margin remains negative, with LTM operating margin near -2%. However, gross margin is strong at 84%, which is typical of scalable software businesses.
That matters because high gross margins can create strong earnings leverage if operating expenses grow more slowly than revenue. Atlassian has also reduced costs through workforce actions and spending discipline.
Based on analysts’ consensus estimates, we use 25% operating margins, reflecting long-term scalability, improving efficiency, and higher monetization of software subscriptions.
3. Exit P/E Multiple: 14.5x
The model uses a 14.5x P/E multiple, which is lower than many historical software valuations. That reflects how investors now value growth stocks more conservatively than in prior years.
Atlassian still deserves premium consideration because of recurring revenue, strong product adoption, and durable customer workflows. Its tools are deeply embedded in many organizations.
Based on analysts’ consensus estimates, we maintain a 14.5x exit multiple given Atlassian’s growth profile, balanced against competition and ongoing profitability debates.
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What Happens If Things Go Better or Worse?
Different scenarios for TEAM stock through 2030 show varied outcomes based on AI monetization, margin execution, and valuation discipline (these are estimates, not guaranteed returns):
- Low Case: Growth slows, competition rises, and valuation remains compressed → 9.1% annual returns
- Mid Case: Atlassian expands AI products, sustains growth, and improves margins steadily → 13.4% annual returns
- High Case: AI adoption accelerates, margins scale sharply, and valuation sentiment improves → 17.4% annual returns
Atlassian still has the profile investors often seek: recurring revenue, strong gross margins, and meaningful free cash flow. However, the stock likely needs better sentiment and stronger margin progress to be rerated higher. The next few earnings reports may play an outsized role in where shares go next.
See what analysts think about TEAM stock right now (Free with TIKR) >>>
Should You Invest in Atlassian Corporation?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up TEAM, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track TEAM alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Analyze Atlassian stock on TIKR Free→
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
