Macquarie raises Atlassian stock rating to Outperform, target to $270

On Thursday, Macquarie analyst Steve Koenig upgraded Atlassian Corporation (NASDAQ:TEAM) stock rating from Neutral to Outperform and set a new price target of $270.00. The company, currently valued at $52.5 billion, trades at $199.66 per share. According to InvestingPro data, analyst targets range from $230 to $420, suggesting significant upside potential. The upgrade followed observations made at the TEAM '25 customer conference and investor forum in Anaheim, where Atlassian announced its new Teamwork Collection. This offering is a cloud bundle that includes Jira, Confluence, Loom, and Rovo agents, featuring agentic AI to enhance project workflow across the apps.

Koenig noted that the Teamwork Collection represents a strategic move by Atlassian to integrate its products more cohesively. The aim is to extend their utility beyond DevOps teams to nontechnical functions as well. This expansion strategy appears to be working, with InvestingPro data showing impressive revenue growth of 23.19% and industry-leading gross profit margins of 81.82%. The analyst also highlighted future plans for Atlassian, based on discussions with partners, to leverage the teamwork graph and app metadata to dynamically and automatically drive user experiences.

The upgrade to Outperform was influenced by the company's valuation and the anticipation of revenue outperformance. Koenig pointed out that recent Data Center price increases of 15-25% for contracts renewing after February 11 should contribute to the company surpassing its conservative fiscal year 2025 guidance.

Further supporting the positive outlook, conversations with customers indicate that Atlassian's strategy to expand its services across various departments within organizations is gaining traction. The expansion covers a range from software development to asset management, help desk, customer service management (CSM), and HR.

Koenig concluded that Atlassian's market valuation currently presents a more appealing entry point for investors. The valuation is considered attractive based on several financial metrics, including enterprise value (EV) to revenue and EV to free cash flow (FCF) relative to Macquarie's growth software index. InvestingPro analysis indicates the stock is currently overvalued compared to its Fair Value, with a "GOOD" overall Financial Health Score of 2.5. Investors can access 8 additional ProTips and comprehensive financial analysis through InvestingPro's detailed research report. Previously, Atlassian's valuation commanded a 15% premium over the index, but it has now aligned with the index, further justifying the positive rating.

In other recent news, Atlassian Corporation has been the focus of multiple analyst reports following their Team '25 conference. UBS analyst Karl Keirstead maintained a Neutral rating with a $230 price target, highlighting Atlassian's recent product updates, including the free inclusion of Rovo AI in all paid editions of its software. TD Cowen also kept a Hold rating with a $320 target, noting positive competitive trends but voicing concerns about IT budget restrictions and AI adoption challenges. BMO Capital reduced its price target to $295 from $360 but maintained an Outperform rating, citing potential market share gains and a decrease in the cost to serve Rovo. Mizuho (NYSE:MFG) Securities lowered its target to $325 from $355 while retaining an Outperform rating, expressing optimism about Atlassian's growth prospects despite macroeconomic concerns. KeyBanc adjusted its price target to $275 from $365, maintaining an Overweight rating, and noted positive customer sentiment and consistent cloud migration activities despite potential future economic pressures. These developments indicate a cautious yet optimistic outlook from analysts regarding Atlassian's performance in the current economic climate.

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