Barclays has lowered its price target for Atlassian Corporation (NASDAQ: TEAM) to $165.00 from $215.00 while maintaining an Overweight rating on the shares. The revised target still implies significant upside from TEAM's current market level of $98.41, which the company has seen decline by about 70% over the past year and which is trading just above its 52-week low of $97.93.
The reduction in the price target comes even as Barclays pointed to a string of operational positives in Atlassian's fiscal second quarter of 2026. Barclays highlighted consistent Cloud migration activity, ongoing expansion in paid seats, and contributions from cross-sell efforts as supportive indicators of underlying business momentum.
Atlassian raised its fiscal 2026 organic Cloud revenue guidance in light of its second-quarter performance, which surpassed analyst expectations. The company delivered a third consecutive quarter of improved Cloud Net Revenue Retention, a metric Barclays viewed as evidence of stronger account-level economics. Gross profit margins remained high at 83.51%, signaling robust pricing power in the face of competitive pressures.
Barclays did flag some short-term distortions in the reported results. The bank noted "noise" associated with Data Center revenue recognition and with contributions from DX, and it warned that DX is expected to be dilutive to margins in the second half of fiscal 2026. Despite those items, Barclays emphasized that Atlassian's organic Cloud revenue outlook and organic non-GAAP margins continue to present strength.
On the competitive front, Barclays expressed confidence that Jira and Confluence retain their relevance within the developer community and would not be fully displaced by recent AI-native tools. The bank pointed to Atlassian's long-standing emphasis on innovation as a structural advantage that could enable organic product expansion and an evolution into future agentic workflows.
Barclays remains constructive on several strategic execution points: the pace of Cloud migration, upsell potential - especially around the Teamwork Collection - the long-term opportunity to monetize AI features, and expansion of business user seats. Importantly, Barclays framed its lower price target as a reflection of "lower peer equity valuations" rather than signaling material company-specific concerns.
Earnings and other analyst moves
Atlassian's fiscal Q2 2026 results exceeded Wall Street expectations on both earnings and revenue. The company reported earnings per share of $1.22, versus a consensus forecast of $0.73, and revenue of $1.59 billion against an anticipated $1.21 billion. These beats underscore the operational strength Barclays and others pointed to even as some analysts trimmed price targets.
Guggenheim lowered its price target to $190 from $225 but maintained a Buy rating. Canaccord Genuity also reduced its target to $185 from $230 while preserving a Buy rating. Canaccord highlighted that Atlassian's Remaining Performance Obligation growth accelerated for a third straight quarter, increasing 44% in the second fiscal quarter - an indicator that customers are making longer-term commitments to the platform.
Market and investor implications
The combination of strong near-term operational results and multiple analyst price target reductions illustrates the tension between company fundamentals and broader equity valuation dynamics. Barclays' decision to retain an Overweight stance while cutting its target underscores that the firm attributes the valuation change primarily to peer multiple compression rather than to deterioration in Atlassian's execution.
Investors will likely watch several items going forward: how materially DX affects margins in the back half of fiscal 2026, the sustainability of Cloud net revenue retention improvements, and the degree to which AI-related product evolution translates into monetization and seat expansion. The recent analyst actions suggest analysts are recalibrating modeled upside while still recognizing the company's operating strengths.