Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Stephens lowered its price target on Atlassian Corporation (NASDAQ:TEAM) to $202.00 from $221.00 on Monday, while maintaining an Equal Weight rating on the software company’s shares. The stock, currently trading at $168.06, has declined 9.49% over the past week and 46.65% in the last six months. According to InvestingPro analysis, the stock appears fairly valued at current levels.
The price target reduction follows Atlassian’s mixed fourth-quarter results, light first-quarter guidance for fiscal year 2026, and mixed full-year outlook for FY26. The company maintains impressive gross profit margins of 82.84% and achieved revenue growth of 19.66% in the last twelve months.
Despite the target cut, Stephens noted several positive factors supporting the stock, including data refuting concerns that AI coding tools would slow growth, as evidenced by strong seat expansion and 120% net revenue retention.
The research firm highlighted Atlassian’s reiteration of its fiscal year 2027 guidance of more than 20% total revenue compound annual growth rate, along with commentary suggesting multiple growth drivers that could keep the company in the high teens growth range long-term.
Stephens based its new $202 price target on a 7.6x enterprise value to fiscal year 2 revenue multiple, compared to the post-COVID average of 10.6x, citing unwillingness to "fight sentiment driven by AI and back-half loaded/FY27-loaded growth needed to meet guidance."
In other recent news, Atlassian Corporation reported strong fourth-quarter earnings, exceeding expectations in both revenue and cloud revenue. The company saw a 22% year-over-year total revenue growth, surpassing Wall Street’s forecast of 20% growth, and showed significant improvements in its enterprise sales approach. Despite these positive results, several analyst firms have adjusted their price targets for Atlassian. Truist Securities lowered its price target to $230, citing improvements in platform deal momentum. Bernstein reduced its target to $296, acknowledging the company’s solid earnings performance amid challenging conditions. TD Cowen set a new target of $220, expressing concerns over artificial intelligence impacts on SaaS companies. Mizuho (NYSE:MFG) and Raymond (NSE:RYMD) James also adjusted their targets to $235 and $250, respectively, while maintaining an Outperform rating, highlighting the company’s strong performance in large deals and cloud business. These developments reflect a cautious yet optimistic outlook from analysts regarding Atlassian’s future growth trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.