Atlassian stock price target lowered to $210 by KeyBanc on AI risk concerns

Investing.com - KeyBanc has reduced its price target on Atlassian Corporation (NASDAQ:TEAM) to $210.00 from $250.00 while maintaining an Overweight rating on the stock. The stock, currently trading at $166.12, has declined over 27% in the past six months, though InvestingPro analysis suggests it’s trading near its Fair Value.

The firm cited "general AI risk" as the primary reason for the price target reduction, though it continues to view the company’s overall position favorably as reflected in the maintained Overweight rating.

KeyBanc noted that Atlassian is taking a "team" approach to growth drivers, including Collections, DC end-of-life transitions, and tuck-in acquisitions, which could help "re-write the narrative" for the company.

The firm approaches Atlassian’s upcoming earnings, scheduled for October 30th, with positive expectations, seeing potential upside in the Cloud segment from continued traction of Collections and Rovo offerings. InvestingPro subscribers can access 8 additional key tips and a comprehensive analysis of Atlassian’s financial health and growth prospects.

KeyBanc also expressed interest in obtaining further details on the Data Center end-of-life strategy, specifically regarding revenue recognition changes contemplated in guidance and potential impacts on near-term Cloud migrations. The company operates with a moderate level of debt, maintaining a healthy current ratio of 1.22.

In other recent news, Atlassian Corporation has completed its acquisition of The Browser Company of New York Inc., aiming to develop an AI-powered browser tailored for knowledge workers. This acquisition is part of Atlassian’s strategic efforts to enhance its offerings amidst the challenges of managing multiple SaaS applications. Furthermore, Bernstein SocGen Group has maintained its Outperform rating on Atlassian with a price target of $296, taking into account recent license changes in Data Center contracts. The firm anticipates these changes could significantly impact total contract values, drawing comparisons to Atlassian’s historical Server product and Oracle license models.

Additionally, Canaccord Genuity has reiterated its Buy rating for Atlassian, setting a price target of $230, based on the company’s initiatives to transition Data Center customers to Cloud deployments. Wells Fargo has also initiated coverage on Atlassian with an Overweight rating and a $216 price target, citing the company’s strong pricing and potential in cloud and AI platforms. These developments come as Atlassian continues to position itself for growth through strategic acquisitions and product enhancements.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.