Atlassian (TEAM) AI Stock Analysis

• Market Cap: $56.47B
• Dividend Yield: N/A
• Average Volume (3M): 2.25M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: 19.12%
• EPS Growth: -161.42%
• Country: US
• Employees: 12,157
• Sector: Technology
• Sector Strength: 82
• Industry: Software - Application
• EPS (TTM): 0.97
• Shares Outstanding: 165,244,900
• 10 Day Avg. Volume: 2,062,024
• 30 Day Avg. Volume: 2,249,111
• PEG Ratio: 3.95
• Price to Book (P/B): 44.72
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.64
• Enterprise Value/Market Cap: 0.80
• Enterprise Value/Revenue: 2.42
• Enterprise Value/Gross Profit: 11.09
• Enterprise Value/Ebitda: -1.44K
• 1Y Price Target: $267.70
• Price Target Upside: 25.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 21

• Rating: 71 Outperform
• Price Target: $235.00 ▲(10.30%Upside)

The overall score is driven by Atlassian's strong revenue and cash flow growth, as well as positive earnings call highlights related to cloud and AI advancements. However, significant challenges with profitability, valuation concerns, and bearish technical indicators temper the outlook.

Positive Factors

AI Adoption

Growing AI adoption and multiple growth levers are seen as factors that could benefit Atlassian significantly.

Cloud Migration

Cloud migrations are expected to accelerate, which has the potential to drive estimates higher.

Negative Factors

After-Hours Trading

Atlassian shares were indicating down over 15% in after-hours trading following Q3 results that were merely in line with top-line expectations and next quarter guidance that narrowly bracketed consensus estimates.

Delayed Deal Closures

Delayed deal closures: Several large Cloud deals closed later than anticipated, impacting Cloud revenue growth.

Atlassian Business Overview & Revenue Model

Company Description

Atlassian Corporation Plc is a leading provider of team collaboration and productivity software designed to help software developers, project managers, and content management teams work more efficiently. Founded in 2002, the company is headquartered in Sydney, Australia, and operates globally. Its core products include Jira, a suite of agile project management tools; Confluence, a team collaboration platform; and Trello, a visual project management application. Atlassian serves a wide range of industries, offering cloud-based and on-premises solutions to enhance teamwork and streamline workflows.

How the Company Makes Money

Atlassian generates revenue primarily through the sale of software subscriptions, licenses, and related support and services. The company offers its products via a subscription-based model, with customers paying for access to software hosted in the cloud or through on-premises licenses. Key revenue streams include Jira Software, Jira Service Management, Confluence, Trello, and other collaborative tools. Atlassian also earns from the Atlassian Marketplace, where third-party developers can sell add-ons and integrations, sharing revenue with Atlassian. The company benefits from a high-volume, low-touch sales model, leveraging a self-service approach that reduces the need for a large sales force. Additionally, strategic partnerships and an extensive ecosystem of integrators and developers contribute significantly to its earnings by expanding the functionality and reach of its core products.

Atlassian Financial Statement Overview

Summary

Atlassian demonstrates strong revenue growth and cash flow generation, crucial for the software industry. However, persistent net losses and negative margins highlight challenges in operational efficiency and profitability.

Income Statement

Atlassian's revenue has shown impressive growth with a TTM increase to $4.96 billion from $4.35 billion in the previous year, a growth rate of approximately 13.9%. The gross profit margin remains strong at 82.2% TTM. However, the company continues to face challenges with profitability, as indicated by negative net profit margins and EBIT margins in both TTM and the previous year, highlighting an ongoing struggle to convert revenue growth into net income.

Balance Sheet

Atlassian maintains a healthy financial position with a strong equity base and a debt-to-equity ratio of 0.90 TTM, indicating a balanced approach to leverage. The return on equity remains negative due to net losses, but the equity ratio improved to 23.3% TTM, reflecting a solid asset base supported by equity.

Cash Flow

The company demonstrates strong cash flow management, with a significant operating cash flow of $1.51 billion TTM and a stable free cash flow, which saw a modest growth rate of about 3.5% from the previous year. The operating cash flow to net income ratio is robust, indicating efficient cash generation relative to net income losses.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
4.96B	4.36B	3.53B	2.80B	2.09B	1.61B
	Gross Profit
4.08B	3.56B	2.90B	2.34B	1.75B	1.35B
	EBIT
-165.65M	-117.08M	-345.22M	-106.46M	101.63M	14.09M
	EBITDA
-45.43M	57.35M	-239.97M	-374.58M	-419.10M	-199.20M
	Net Income Common Stockholders
-133.54M	-300.52M	-486.76M	-614.12M	-696.32M	-350.65M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.77B	2.34B	2.11B	1.46B	1.23B	2.16B
	Total Assets
2.88B	5.21B	4.11B	3.36B	2.95B	3.89B
	Total Debt
846.53M	1.25B	1.28B	1.31B	605.35M	1.15B
	Net Debt
-598.76M	-927.59M	-820.19M	-70.77M	-313.88M	-326.22M
	Total Liabilities
2.18B	4.18B	3.45B	3.03B	2.65B	3.32B
	Stockholders Equity
693.52M	1.03B	654.67M	335.60M	294.91M	575.31M
Cash Flow		Free Cash Flow
1.46B	1.42B	842.30M	808.89M	808.01M	538.50M
	Operating Cash Flow
1.51B	1.45B	868.11M	883.50M	841.33M	574.21M
	Investing Cash Flow
-220.50M	-963.75M	-1.26M	46.85M	256.64M	-318.93M
	Financing Cash Flow
-569.69M	-408.22M	-148.42M	-461.73M	-1.65B	-42.58M

Atlassian Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 213.05
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TEAM, the sentiment is Negative. The current price of 213.05 is below the 20-day moving average (MA) of 213.68, above the 50-day MA of 210.90, and below the 200-day MA of 226.03, indicating a neutral trend. The MACD of -0.60 indicates Negative momentum. The RSI at 49.69 is Neutral, neither overbought nor oversold. The STOCH value of 71.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TEAM.

Atlassian Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNOW	78 Outperform	$69.48B	―	-40.16%	―	27.50%	-49.96%
WDAY	75 Outperform	$67.48B	139.55	5.70%	―	15.38%	-67.58%
DOCU	73 Outperform	$15.24B	14.85	70.20%	―	7.85%	935.80%
DDOG	73 Outperform	$42.19B	262.50	6.48%	―	25.54%	40.02%
TEAM	71 Outperform	$56.47B	―	-34.33%	―	19.12%	-161.42%
HUBS	70 Neutral	$32.14B	7,452.21	-1.34%	―	19.17%	83.20%
Sector *	62 Neutral	$11.90B	10.64	-7.50%	2.90%	7.41%	-8.19%

Atlassian Corporate Events

Atlassian Appoints Karen Dykstra to Board of Directors

On April 9, 2025, Enrique Salem announced his retirement from the Board of Directors of Atlassian Corporation, effective April 14, 2025, after nearly 12 years of service. Subsequently, on April 11, 2025, the Board appointed Karen Dykstra as a new director, effective April 14, 2025. Dykstra, who has previously held executive roles at VMware and serves on boards of other prominent companies, will join Atlassian’s Audit Committee. Her compensation includes a pro-rated retainer and restricted stock units, with provisions for accelerated vesting upon a company sale.