BMO Capital lifts Atlassian stock target to $360, keeps Outperform rating

On Friday, BMO Capital Markets sustained a positive outlook on Atlassian Corporation (NASDAQ:TEAM), as analyst Keith Bachman increased the company’s price target to $360 from the previous $292, while maintaining an Outperform rating on the stock. According to InvestingPro data, analyst targets for Atlassian range from $245 to $420, with the stock currently trading above its calculated Fair Value.

Bachman’s confidence in Atlassian’s prospects is rooted in the expectation that the company can maintain a growth rate exceeding 20% through the fiscal year 2026. This aligns with the company’s current performance, as InvestingPro data shows revenue growth of 23.19% and an impressive gross profit margin of 81.82%. This projection is detailed in an exhibit within the analyst’s report, which outlines potential growth contributions from various segments of Atlassian’s operations.

The report acknowledges some overlaps in growth categories, specifically noting that Cloud conversions could play a role in both cross-selling and up-selling opportunities. However, the analysis has adjusted the expected growth contribution from Rovo, a solution that may be bundled with more premium product offerings instead of being priced separately.

Through this assessment, Bachman aims to determine the necessary growth from product mix and customer base expansion, assuming other factors remain constant. The conclusion drawn from the analysis suggests that approximately 450 points of growth could be achieved from a combination of product mix enhancements and an increase in the number of seats sold.

The updated price target reflects BMO Capital’s belief in Atlassian’s ability to execute its growth strategy and expand its market presence in the coming years. The firm’s Outperform rating indicates that they expect Atlassian’s stock performance to be strong relative to the market or its sector peers. InvestingPro analysis supports this outlook, showing a GOOD overall financial health score, with additional insights available in the comprehensive Pro Research Report covering this top tech stock.

In other recent news, Atlassian Corporation has been the subject of several analyst upgrades following robust financial performance. Piper Sandler, TD Cowen, KeyBanc, Bernstein, and Cantor Fitzgerald all raised their stock targets for Atlassian, citing strong second-quarter cloud growth and impressive revenue increase of 23.19% over the last twelve months.

Piper Sandler adjusted the price target to $365, with TD Cowen lifting it to $320. KeyBanc raised the target to $365, emphasizing the company’s cloud growth. Bernstein analysts increased the stock target to $325, while Cantor Fitzgerald lifted its target to $304.

These adjustments were largely influenced by Atlassian’s successful implementation of its cloud strategy and the significant growth in its artificial intelligence offerings. Analysts also highlighted the company’s increased traction at the enterprise level and the upward revision of its full-year guidance.

These recent developments indicate a positive financial trajectory for Atlassian, with a focus on cloud services and AI advancements. However, it’s important to note that these are analyst predictions and not guarantees of future performance.

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