Key Stats for TEAM Stock
- Past week’s performance: -0.6%
- 52-week range: $64 to $242
- Valuation model target price: $98
- Implied upside: 47.2% over 2.2 years
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What Happened?
Atlassian Corporation (TEAM) stock edged up last week, but that small move came after another volatile stretch for software shares. On March 24, Reuters reported that software stocks were the top laggards in a broader market selloff, and Atlassian fell between 3.5% and 7.5% that day with other cloud names.
That pressure came on top of a major company-specific restructuring announced earlier in March. Reuters reported that Atlassian will lay off about 1,600 employees, or roughly 10% of its workforce, as it shifts resources toward AI and enterprise sales.
The company said it expects $225 million to $236 million of charges, and CEO Mike Cannon-Brookes told employees that AI changes “the mix of skills” and “the number of roles required in certain areas.”
Even so, the business backdrop is not as weak as the stock chart suggests. Atlassian reported Q2 fiscal 2026 revenue of $1.586 billion, above analyst estimates of $1.544 billion, and cloud revenue grew 26% year over year to a first-ever $1 billion quarter.
In its shareholder letter, management said it closed Q2 with “incredible momentum” and highlighted enterprise sales execution, rising cloud adoption, and strong remaining performance obligations.
So last week’s muted stock move looked more like a pause than a verdict. Investors are still balancing two opposing ideas: Atlassian is executing well operationally, but the software sector remains under pressure from AI disruption fears and multiple compressions. With Q3 results expected on May 7, the market appears to be waiting for fresh proof that growth and margins can keep improving.
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Is TEAM Stock Undervalued?
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 18.8%
- Operating Margins: 26.5%
- Exit P/E Multiple: 13.1x
Based on these inputs, the model estimates a target price of $98.44, implying 47.2% total upside from the current share price and a 18.7% annualized return over the next 2.2 years.
The core business still supports a premium growth narrative. Total revenue rose to $5.76 billion on an LTM basis, gross margin reached 84.1%, and the forward two-year revenue CAGR in the overview is about 19.9%. Those numbers matter because Atlassian’s products, led by Jira and Confluence, remain deeply embedded in software development, IT service management, and enterprise workflows.
But profitability is still the debate. LTM EBIT margin in the overview is -2.2%, and LTM net income remains negative, largely because the company keeps investing heavily in R&D, sales, and stock-based compensation.
Atlassian generated $1.28 billion of LTM free cash flow, so the business is cash generative, but investors want clearer evidence that revenue growth can turn into durable earnings growth.
That leaves Atlassian looking neither obviously cheap nor obviously expensive in a simple way. The stock has already fallen sharply in 2026, which lowers expectations, but the market is still asking how much AI helps Atlassian versus how much it threatens software economics more broadly.
What’s Driving TEAM Stock Going Forward?
The next big catalyst is Q3 fiscal 2026 results, expected on May 7. Investors will focus on cloud growth, enterprise deal momentum, and whether restructuring starts to improve the cost base. They will also watch whether management keeps its operating margin outlook near the 25.5% non-GAAP level discussed in the Q2 earnings materials.
AI product execution is another major driver. In late February, Atlassian introduced agents in Jira and expanded its Model Context Protocol investments, aiming to let human teams and AI agents work together inside enterprise workflows. That matters because Atlassian is trying to show customers that AI will strengthen Jira and its system of work, not make it less relevant.
Management commentary also remains important. In the Q2 release, the company said it delivered its first-ever $1 billion cloud revenue quarter, while the shareholder letter said RPO rose 44% to $3.8 billion. Those figures matter because they suggest larger customers are making longer commitments, which can improve revenue visibility and support future margin expansion.
At the same time, the market will keep watching sector-wide sentiment. Reuters has reported that software stocks have underperformed badly in 2026 as investors worry that AI agents could disrupt traditional software models. So Atlassian’s stock may keep trading on both company execution and broader AI sentiment until the market gets more clarity on which software vendors will benefit most.
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Should You Invest in Atlassian Corporation?
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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.
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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!
