How Does Atlassian Stack Up After Its Recent Share Price Rebound in 2025?

Thinking about what to do with Atlassian stock right now? You’re not alone. It’s the kind of company that tends to get people talking, especially after the wild ride its shares have taken lately. Just over the past week, Atlassian bounced back by 5.1%, hinting at renewed optimism. However, when you look over a month, the picture gets cloudier, with the stock down nearly 12%. Year-to-date, it has been a rougher journey, with shares off by 37.3%. The longer-term charts show a similar pattern, reflecting shifts in growth potential and changing appetites for risk in the market.

Investors have been navigating a tough tech environment, and as collaboration tools become a bigger story worldwide, Atlassian is a name that continues to spark debate about what it’s truly worth. Maybe you’re looking at the numbers and wondering if now is a smart time to get in, sit tight, or cut your losses. The short answer: according to standard valuation checks, Atlassian scores a 4 out of 6, suggesting it is undervalued by several important measures but not across the board.

What does that actually mean for your money, and how can you dig deeper than just the headline numbers? Next, let’s break down the common valuation approaches that guide veteran investors. Then stick around for an even better way to think about what “value” really means for Atlassian today.

Why Atlassian is lagging behind its peers

Approach 1: Atlassian Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future free cash flows and discounting them back to today's dollar value. This approach helps investors gauge what a business is really worth, beyond just looking at its current share price.

For Atlassian, the most recent reported Free Cash Flow stands at $1.42 Billion. Analysts have projected this figure to grow annually, reaching a forecasted $3.50 Billion by 2030. Initial projections over the next five years are drawn from analysts, while later years are extrapolated by Simply Wall St using trend-based growth rates.

Adding up these discounted future cash flows gives an estimated intrinsic value of $279.43 per share for Atlassian. Compared to the current share price, this suggests an implied discount of 45.6%, meaning the stock is significantly undervalued based on its expected cash generation.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Atlassian.

Our Discounted Cash Flow (DCF) analysis suggests Atlassian is undervalued by 45.6%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Atlassian Price vs Sales (P/S Multiple)

The Price-to-Sales (P/S) ratio is a popular valuation tool, especially for technology companies like Atlassian where growth remains a key focus and profits can fluctuate. This multiple compares a company’s market capitalization to its total sales, providing a snapshot of how much investors are willing to pay per dollar of revenue. It is particularly relevant for firms with strong revenue growth, even if earnings are lumpy, as is common in the software sector.

Interpreting the P/S ratio is not just about comparing numbers. Every company and industry has a unique profile, including growth rates, risks, and business models, all of which influence what counts as a “reasonable” multiple. For Atlassian, the current P/S stands at 7.67x. To put that in perspective, peers in the software industry average around 13.28x, while the industry overall sits at roughly 4.96x.

This is where Simply Wall St's “Fair Ratio” comes in. The Fair Ratio is a proprietary metric that customizes the ideal multiple for Atlassian, accounting for more than just basic benchmarks. It considers factors like Atlassian’s sales growth outlook, its sector, profit margins, risks, and market capitalization, painting a much more nuanced picture than a straight comparison with industry peers. For Atlassian, the Fair Ratio is calculated at 13.52x.

Comparing the current P/S ratio of 7.67x to the Fair Ratio of 13.52x reveals the stock is trading below its individualized fair multiple. This suggests the market may be undervaluing the company’s growth profile and fundamentals at present.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Atlassian Narrative

Earlier, we mentioned there is an even better way to think about valuation, so let’s introduce you to Narratives. A Narrative is the story behind the numbers. It is an investor’s perspective that connects their assumptions about Atlassian’s future growth, profitability, and risks directly to their own estimate of fair value.

Unlike traditional analysis, Narratives allow you to clearly articulate why you believe Atlassian is undervalued, overvalued, or fairly priced, grounding your opinion in a set of specific financial forecasts and business scenarios, not just a simple number. Each Narrative links Atlassian’s business story, such as how well it will capitalize on AI, grow within enterprises, or navigate competition, to a forecast for metrics like future revenue, earnings, and profit margins, and ultimately to your own sense of the company’s true worth.

Narratives are easy to use and available to everyone within the Community page on Simply Wall St’s platform, where millions of investors compare, debate, and update their outlooks. They make it simpler to act. By lining up your Narrative-driven fair value next to the current share price, you can decide with more confidence when to buy, hold, or sell.

Every Narrative remains dynamic and automatically updates as new information, news, or earnings are released, so your thesis evolves with the facts. For example, one investor’s Narrative for Atlassian might forecast aggressive AI-driven sales growth and a 26% net profit margin in 2030, leading to a fair value of $320. Another, more cautious Narrative might hinge on slower cloud adoption and a conservative margin, pointing to a much lower $196 fair value.

Do you think there's more to the story for Atlassian? Create your own Narrative to let the Community know!

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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