Atlassian (TEAM) Forecasts 14.9% Revenue Growth, Eyes Profitability Within Three Years

Atlassian (TEAM) is not yet profitable, but the company has reduced its losses at an average rate of 24.1% annually over the past five years. Investors are watching as revenue is forecast to climb by 14.9% a year, outpacing the broader US market, and earnings are projected to surge at a rapid 56.71% annually, with profitability expected within three years.

See our full analysis for Atlassian.

Now that we have the latest numbers, it's time to see how they compare to the dominant narratives around Atlassian. Which perspectives gain support, and which might get a reality check?

See what the community is saying about Atlassian

Premium Upsells Fuel Margin Ambitions

• Profit margins are projected to rise from -4.9% today to 3.6% within three years, according to analyst models. This signals a possible shift from unprofitability to positive margin territory in a relatively short period.
• Analysts' consensus view highlights operational leverage from AI-fueled product expansion and upselling premium features, which is expected to accelerate margin improvement.
  • Expanded cloud adoption and new enterprise deals support the case for stronger gross margins as recurring revenue opportunities scale.
  • This margin optimism is weighed against the risks that investments in AI and R&D may not immediately boost pricing power or revenue, causing a slower-than-hoped margin turnaround.

DCF Valuation Underscores Discount Narrative

• Atlassian's share price of $169.42 sits 30% below its DCF fair value of $243.91 and also trails the peer group on a price-to-sales basis, trading at 8.2x compared to the peer average of 13.2x.
• According to the consensus narrative, these valuation metrics reinforce the argument that high-growth prospects are not fully priced in despite ambitious revenue and earnings targets.
  • Bears may flag the company's premium compared to the broader software industry (5.2x price-to-sales), but the discount to both DCF fair value and peers remains central to bullish valuation claims.
  • The lack of insider selling this quarter adds confidence for investors who focus on governance and leadership stability as valuation signals.

Analyst Target Poses Lofty Expectations

• The consensus analyst price target stands at $244.75, suggesting 44% upside from the current $169.42 share price. Achieving this requires Atlassian to reach $8.7 billion in revenue and a PE ratio of 282.6x by 2028.
• Analysts' consensus view calls out a notable level of disagreement among forecasters, with high margin for error depending on the success of large customer cloud migrations and premium adoption.
  • Some analysts see earnings as high as $459.9 million, while the most cautious project just $198.3 million, showcasing the range of outcomes tied to execution on strategic initiatives.
  • The ambitious price target reflects optimism about migration, up-selling, and cloud growth, but hinges on Atlassian delivering consistently against these aggressive growth forecasts.
• To see how the big-picture investment narrative stacks up for Atlassian against these latest numbers, see the full consensus view in our dedicated analysis. 📊 Read the full Atlassian Consensus Narrative.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Atlassian on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Interpreting the figures another way? Take just a few minutes to put your own perspective on record and shape the story your way. Do it your way

A great starting point for your Atlassian research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

Atlassian’s path to profitability relies on ambitious growth targets, but volatile earnings forecasts and narrow margins create an uncertain turnaround.

If you’re seeking steadier growth and more consistent earnings momentum, check out stable growth stocks screener (2100 results) for companies that deliver reliable results through all market conditions.

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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