Atlassian Corporation (NASDAQ:TEAM) Just Reported Earnings, And Analysts Cut Their Target Price

Atlassian Corporation (NASDAQ:TEAM) shareholders are probably feeling a little disappointed, since its shares fell 8.8% to US$208 in the week after its latest third-quarter results. Atlassian reported revenues of US$1.4b, in line with expectations, but it unfortunately also reported (statutory) losses of US$0.27 per share, which were slightly larger than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the 32 analysts covering Atlassian are now predicting revenues of US$6.18b in 2026. If met, this would reflect a substantial 24% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 66% to US$0.56. Before this latest report, the consensus had been expecting revenues of US$6.23b and US$0.57 per share in losses.

View our latest analysis for Atlassian

As a result, it's unexpected to see that the consensus price target fell 7.0% to US$280, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Atlassian, with the most bullish analyst valuing it at US$420 and the most bearish at US$215 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Atlassian'shistorical trends, as the 19% annualised revenue growth to the end of 2026 is roughly in line with the 23% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Atlassian is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Atlassian's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Atlassian. Long-term earnings power is much more important than next year's profits. We have forecasts for Atlassian going out to 2027, and you can see them free on our platform here.

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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.