Key Stats for Atlassian Stock
- Current Price: $88.88
- Target Price (Mid): ~$150
- Street Target: ~$147
- Potential Total Return: ~68%
- Annualized IRR: ~13% / year
- Earnings Reaction: +29.58% (April 30, 2026)
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What Happened?
Atlassian (TEAM) entered Q3 earnings as one of the most beaten-down names in software. The stock had fallen from a 52-week high of $232.36 to a low of $56.01, hammered by the market’s fear that AI agents would hollow out seat-based collaboration tools. Then the numbers landed and the narrative shifted hard.
Atlassian shares jumped more than 29% after the company topped Wall Street’s expectations for the fiscal third quarter, reporting strong cloud growth and data center revenue. The stock closed at $88.88. Revenue of $1,786.97 million beat the $1,697.98 million consensus by 5.24%, and adjusted EPS of $1.75 beat the $1.34 estimate by nearly 31%.
CEO and Co-Founder Mike Cannon-Brookes said in the earnings release: “Our strong Q3 results show the power of our strategy in action, with total revenue growing 32% year-over-year to $1.8 billion, as customers sign bigger, longer-term commitments, and connect their teams and workflows on our AI-powered platform.”
Three numbers define the quarter. Cloud revenue hit $1.13 billion, accelerating to 29% year-over-year growth. RPO (remaining performance obligations, meaning contracted future revenue not yet recognized) grew 37% to $4 billion. And the Service Collection crossed $1 billion in ARR (annual recurring revenue), growing over 30% year-over-year. On the AI side, Rovo credit usage is growing more than 20% month-over-month, and Cannon-Brookes noted that customers using Rovo are growing their ARR at roughly twice the rate of those who are not.
Adding a second catalyst, Atlassian announced the next phase of its multi-year partnership with Google Cloud at Cloud Next ’26, bringing Gemini 3 Flash into Rovo and deepening integrations with Google Workspace and Gemini Enterprise, with Atlassian also named the 2026 Google Cloud Partner of the Year in the Application Development–Developer Experience category.
Bears are not fully silenced. CFO James Chuong disclosed on the earnings call that Atlassian recognized approximately $50 million more in upfront data center term license revenue than expected in Q3, as large customers front-loaded purchases ahead of the announced data center end-of-life date. That tailwind will not repeat at the same scale in Q4, and GAAP net income remained negative. The honest read is that Q3 was excellent, but investors need Q4 to confirm the trend holds once the pull-forward effect normalizes.
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Is Atlassian Undervalued Today?
At 12.22x NTM EV/EBITDA, Atlassian trades below the software peer mean of 13.07x tracked by TIKR. ServiceNow sits at 14.03x and Microsoft at 13.66x on the same metric, neither of which posted 30%-plus revenue growth in their most recent quarter. Salesforce is cheaper at 8.71x, but its growth profile is far more mature. The discount suggests the market is still pricing in execution risk rather than rewarding Atlassian’s current growth rate.
What makes that discount harder to justify after Q3 is the NRR (net revenue retention, meaning the percentage of revenue Atlassian keeps and expands from existing customers each year) picture. Cannon-Brookes noted on the call that NRR stayed north of 120% and has been ticking up for what he described as approximately the third or fourth quarter in a row. That directly contradicts the seat compression fear. Customers are not shrinking their Atlassian footprint as AI grows. They are expanding it, and the Teamwork Collection, which bundles Jira, Confluence, Loom, and Rovo with 10x more AI credits per user than the stand-alone plan, is the vehicle driving that expansion.
The risk that still warrants caution is free cash flow sustainability against GAAP losses. Atlassian generated $1,203.94 million in LTM levered FCF, supported by an 84.0% LTM gross margin, but GAAP net income remains negative. Chuong also flagged that the data center pull-forward creates lumpiness in reported revenue and RPO, and Atlassian plans to release historical subscription ARR data at its Team ’26 investor forum to help normalize those timing effects. Until then, the revenue picture remains more uncertain than the 32% headline suggests.
The 30-analyst Street consensus reflects this balance, with a mean target of around $147, 21 Buys, 5 Outperforms, and 7 Holds against zero Sells.
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TIKR Advanced Model Analysis
- Current Price: $88.88
- Target Price (Mid): ~$150
- Potential Total Return: ~68%
- Annualized IRR: ~13% / year
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14% revenue CAGR. The two drivers are cloud subscription growth from the ongoing data center migration cycle and Rovo monetization as enterprises upgrade to collection tiers with higher AI credit allowances. Net income margins are projected to expand to around 21%, up from 17.5% in the last fiscal year, as post-restructuring operating leverage builds.
The high case reaches around $308 by 6/30/30 at roughly 16% annualized, requiring approximately 16% revenue CAGR and margins near 22%. That scenario requires Rovo monetization to gain meaningful traction and data center churn to stay manageable. The low case comes in at around $174 at roughly 9% annualized, where revenue CAGR slows to around 13% and margins reach only around 20%. The primary downside risk is data center churn outpacing cloud migration absorption as the end-of-life deadline approaches.
Conclusion
The number to watch at Q4 FY2026 earnings, expected in late July or early August, is cloud revenue growth against the approximately 26.5% full-year guidance. If Q4 cloud holds that pace after the data center pull-forward normalizes, it confirms Q3 was structural, not timing-driven. A print meaningfully below 25% reopens the bear case.
Atlassian answered the market’s central question this week. The Teamwork Graph is not a casualty of AI. Based on Q3, it may be the reason Atlassian wins because of it.
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Should You Invest in Atlassian?
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 Atlassian, 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!
