Guggenheim has reduced its price target on Atlassian Corporation (TEAM) to $190.00 from $225.00, while keeping a Buy rating on the shares. The stock is trading at $98.41, just above its 52-week low of $97.93, a level that represents roughly a 70% decline from the 52-week high of $326.00.
The analyst action comes after Atlassian posted stronger-than-expected results for the period, which the company characterized as a "clean Cloud beat and raise." Management signaled a modest organic raise for the second half of the fiscal year, reporting 26% growth in the second quarter and lifting full-year guidance by 180 basis points to 24.3%.
In its note, Guggenheim called out several performance indicators it deems favorable. Paid seat expansions remain a tailwind to Cloud revenue, contributing in the high single-digit percentage range to Cloud growth. Cloud Net Revenue Retention exceeded 120% for a third consecutive quarter, and the Teamwork Collection surpassed 1 million paid seats, with seat counts increasing by more than 10%.
Additional metrics cited include a gross profit margin of 83.5% as reported in InvestingPro data, which Guggenheim said underpins Atlassian's ability to continue investing in growth initiatives. The firm also pointed to company-level free cash flow margins in excess of 25% as evidence of healthy cash generation.
Guggenheim acknowledged market concerns that emerging frontier labs could supplant Atlassian's workflow tools or that planned layoffs might depress seat counts, but stated there is a "lack of evidence of either happening today." The analyst closed by noting Atlassian's commitment to returning capital, with a planned share buyback program of $1.35 billion to $1.80 billion, equivalent to about 6% of total diluted shares according to the firm.
Atlassian's recently reported fiscal Q2 2026 results outperformed Wall Street expectations on both the earnings and revenue lines. The company reported earnings per share of $1.22, ahead of the forecasted $0.73, and revenue of $1.59 billion versus an anticipated $1.21 billion.
Canaccord Genuity also adjusted its outlook, reducing its price target on Atlassian to $185 from $230 while maintaining a Buy rating. Canaccord highlighted an acceleration in Remaining Performance Obligation (RPO) growth, which rose 44% in the second quarter, an indicator the firm interprets as customers committing to longer-term arrangements with the platform.
Both analyst actions and the reported financials arrive against a backdrop of broader market volatility that has affected the share price. Despite the strong quarter and management commentary, analysts have moderated near-term valuation assumptions while still retaining constructive ratings.
Sector impact: Software and enterprise application markets, cloud services providers, and investor sentiment in technology equities.