Street Calls of the Week
Investing.com - Mizuho has reiterated an Outperform rating and $235.00 price target on Atlassian Corporation (NASDAQ:TEAM), which currently trades at $169.63, following the company’s surprise announcement to acquire DX, an engineering intelligence platform. According to InvestingPro data, analyst targets range from $196 to $480, with the stock currently showing impressive gross profit margins of 82.84%.
The acquisition, valued at approximately $1 billion, equals Atlassian’s largest previous acquisition of Loom in 2023. The deal was announced Thursday morning as part of what Mizuho describes as a "flurry of recent activity" from the $44.5B market cap company. Despite a challenging 26.2% decline over the past six months, InvestingPro analysis indicates strong revenue growth of 19.66% in the last twelve months.
Mizuho believes the acquisition could enable Atlassian to capitalize on customer confusion over the return on investment of AI technologies, while creating cross-selling opportunities with developers and engineering leaders.
Despite maintaining its positive outlook, Mizuho expressed initial questions about the medium-term revenue impact to Atlassian and the durability of the acquired asset.
The firm continues to view Atlassian’s multi-year growth prospects favorably, citing pricing power and expected Data Center-to-Cloud migrations over the next few years, further amplified by a recent Data Center sunsetting announcement.
In other recent news, Atlassian Corporation has announced a significant acquisition of engineering intelligence company DX for approximately $1 billion in cash and restricted stock. This move aims to enhance Atlassian’s ability to provide data-driven insights into developer productivity and satisfaction by integrating DX into its suite of tools. Additionally, Atlassian has entered into a definitive agreement to acquire The Browser Company of New York for $610 million, which includes the company’s cash holdings. This acquisition involves creators of the Dia and Arc browsers.
In corporate governance developments, Atlassian appointed AI entrepreneur Jason Warner to its Board of Directors, effective October 1, 2025. Warner will replace Heather Mirjahangir Fernandez, who will retire after a decade of service. On the analyst front, Cantor Fitzgerald reiterated its Overweight rating for Atlassian, highlighting the opportunity to transition Data Center customers to its cloud platform. Similarly, William Blair maintained its Outperform rating, noting that Atlassian trades at a slight discount compared to its large-cap software peers.
Raymond James also reiterated its Outperform rating, following the acquisition announcement. These recent developments provide a comprehensive view of Atlassian’s strategic moves and analyst perspectives.
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