TD Cowen lifts Atlassian stock price target to $320, retains hold

On Friday, TD Cowen analyst Derrick Wood increased the price target on Atlassian Corporation (NASDAQ:TEAM) shares to $320 from the previous target of $280. The firm maintained a Hold rating on the stock despite the adjustment. According to InvestingPro data, Atlassian, currently valued at $69.5 billion, is trading above its Fair Value, with analyst targets ranging from $245 to $420. The revision follows Atlassian’s reported second-quarter growth of 21%, which surpassed Wall Street’s expectations of 17%. This performance marks a greater beat than the previous quarter’s roughly 3% exceedance.

The company’s robust quarterly results were attributed to sustained stability in the macroeconomic environment and the small and medium-sized business (SMB) markets. Additionally, Atlassian experienced strong seasonal enterprise sales execution. InvestingPro data reveals impressive gross margins of 81.8% and strong revenue growth of 23.2% over the last twelve months, with 8 more exclusive ProTips available to subscribers. In light of these positive outcomes, the fiscal year 2025 guidance was revised upward, with the Cloud growth forecast being particularly noteworthy. The Cloud segment’s growth guidance was increased by approximately 250 basis points to 26.5%, representing a more significant raise compared to the last quarter.

Following the announcement, Atlassian’s shares experienced a gap up, indicating a positive market response to the company’s latest financial update. The new price target reflects the analyst’s view of Atlassian’s healthy valuations after the recent growth in share price.

Wood’s commentary on the rating and price target adjustment highlighted the reasons behind the Hold stance. He noted, "TEAM reported 2Q growth of 21%, above Street at 17%, w/ the ~4% beat above last qtr’s ~3% beat. Strength was driven by continued stability in the macro & SMB markets, alongside strong seasonal enterprise sales execution. FY25 guide was again raised, with Cloud growth guide revised up ~250bps to +26.5%, a bigger raise than last qtr. Shares gap up into healthy valuations. Maintain Hold. PT to $320."

Investors and market watchers will likely continue to monitor Atlassian’s performance closely, especially in the cloud sector, which has been a significant growth driver for the company. The updated guidance and the revised price target by TD Cowen provide a current snapshot of the company’s financial health and market position. For deeper insights into Atlassian’s valuation and growth prospects, InvestingPro subscribers can access a comprehensive Pro Research Report, featuring detailed analysis of the company’s financial health metrics and growth potential.

In other recent news, Atlassian Corporation has been the subject of several analyst upgrades following robust financial performance. KeyBanc raised the company’s stock target to $365, citing the company’s strong cloud growth. Bernstein analysts also increased the stock target to $325 after Atlassian’s second-quarter fiscal year 2025 earnings surpassed expectations with significant revenue growth. Cantor Fitzgerald adjusted the stock target to $304, maintaining a neutral rating, reflecting Atlassian’s strong performance in the second fiscal quarter of 2025.

Scotiabank (TSX:BNS) updated the stock target to $330, observing impressive growth with revenue increasing 23.19% over the last twelve months. Mizuho (NYSE:MFG) analysts, expressing confidence in Atlassian’s multi-year growth potential, lifted the stock target to $355. These developments suggest a positive financial trajectory for Atlassian, with a focus on cloud services and AI advancements.

Analysts from various firms highlighted Atlassian’s strong enterprise performance, AI growth, and pricing strategies as drivers for the positive outlook. However, the management’s conservative guidance for the next quarter, despite these positive factors, suggests a cautious approach amidst evolving market dynamics.

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