Assessing Atlassian (TEAM) Valuation After A Sharp Disconnect In Recent And 1-Year Share Returns

Recent share performance puts Atlassian (TEAM) under the microscope

Recent volatility in Atlassian (TEAM) has pushed the stock into focus, with a near 19% gain over the past month contrasting with a year to date decline of about 45% and a 1 year total return drop of roughly 60%.

See our latest analysis for Atlassian.

Atlassian’s recent 19.4% 30 day share price return and 16.7% 90 day share price return contrast sharply with its 59.5% 1 year total shareholder return decline, suggesting short term momentum is building while longer term holders remain significantly underwater.

If this kind of rebound has you thinking about where else growth and volatility might create openings, it could be worth scanning 63 profitable AI stocks that aren't just burning cash

With Atlassian reporting US$6,190.2m in revenue, a net loss of US$216.8m and trading at a sizeable discount to both analyst targets and some intrinsic estimates, is the stock on sale, or is the market already discounting future growth?

Most Popular Narrative: 58.3% Undervalued

According to the most followed narrative, Atlassian’s fair value of $204.74 sits well above the last close at $85.42, which puts a spotlight on how ambitious the long term assumptions really are.

Based on analyst consensus and industry trends, Atlassian’s revenue is expected to maintain a strong double-digit growth trajectory. Analysts forecast revenue growth around 15–20% annually in the coming years. In FY2024 Atlassian delivered $4.36B revenue (23% YoY) and is projected to reach ~$5.28B in FY2025. Consensus estimates see revenue around $7.6B by FY2027. Looking further to 2030, I assume Atlassian can grow revenue roughly in line with the mid-teens analyst forecast, with potential upside from the AI and enterprise catalysts. This yields an estimated revenue in the ~$11–12 billion range by 2030. Such growth is underpinned by Atlassian’s expanding addressable market and multiple growth levers (new products, cloud conversion, user expansion). It is worth noting Atlassian’s own long-term target: even after doubling in size, it would still be capturing under 20% of its identified market opportunity, leaving room for sustained growth beyond five years.

Read the complete narrative.

Curious how this valuation leans on fast improving margins, ambitious revenue compounding and a rich future earnings multiple. The full narrative lays out the exact growth, profitability and pricing assumptions that bridge today’s share price to that $204.74 figure.

Result: Fair Value of $204.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, investors still need to weigh up competitive pressure from larger software rivals, as well as the risk that enterprise adoption or cloud migrations take longer than this narrative assumes.

Find out about the key risks to this Atlassian narrative.

Next Steps

With such mixed signals across valuation, growth assumptions, risks and rewards, it makes sense to move quickly and review the underlying detail yourself, starting with the 4 key rewards and 1 important warning sign.

Ready for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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