Atlassian Corporation (NASDAQ:TEAM) Just Reported And Analysts Have Been Lifting Their Price Targets

Shareholders of Atlassian Corporation (NASDAQ:TEAM) will be pleased this week, given that the stock price is up 19% to US$224 following its latest first-quarter results. The results don't look great, especially considering that statutory losses grew 91% toUS$0.48 per share. Revenues of US$1.2b did beat expectations by 2.8%, but it looks like a bit of a cold comfort. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Atlassian after the latest results.

Check out our latest analysis for Atlassian

Taking into account the latest results, the current consensus from Atlassian's 26 analysts is for revenues of US$5.09b in 2025. This would reflect a decent 12% increase on its revenue over the past 12 months. Losses are supposed to decline, shrinking 12% from last year to US$1.32. Before this earnings announcement, the analysts had been modelling revenues of US$5.07b and losses of US$0.82 per share in 2025. While this year's revenue estimates held steady, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Although the analysts are now forecasting higher losses, the average price target rose 15% to 218.5248, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Atlassian at US$420 per share, while the most bearish prices it at US$180. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Atlassian's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while Atlassian's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Atlassian going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Atlassian has 1 warning sign we think you should be aware of.

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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.