Piper Sandler has reduced its price target on Atlassian Corporation (NASDAQ: TEAM) to $200.00 from $280.00 but kept an Overweight rating on the shares.
The firm made the change against a backdrop of weak share performance - Atlassian stock has fallen nearly 70% over the past 12 months and was trading at $94.53, close to a reported 52-week low of $97.93.
The target downgrade followed Atlassian’s second fiscal quarter results. Piper Sandler described the quarter as "solid," and specifically noted it saw no negative impact from AI adoption. The research team said Atlassian is seeing better seat expansion among customers that have adopted AI tools.
Key financial metrics highlighted by Piper Sandler include Atlassian’s 83.5% gross profit margins and 20.1% revenue growth, both underscoring continued profitability and top-line momentum despite recent pressure on the share price.
At the same time, Piper Sandler acknowledged a "slightly lighter cloud beat" relative to the first fiscal quarter, a point the firm said could spur debate following the earnings release. The research house also welcomed Atlassian’s modest upward revision to its organic annual cloud guidance, which it said exceeded the quarterly upside.
On valuation, Piper Sandler estimated the company’s market value to be roughly 10 times its calendar year 2027 free cash flow forecast. The firm indicated that this multiple implies an overly pessimistic long-term growth scenario relative to its view of the business.
Despite cutting the price target, Piper Sandler continued to list Atlassian as a "top idea" in its coverage universe and retained the Overweight recommendation.
Several other broker-dealers adjusted their Atlassian targets after the second-quarter update. The actions and analyst observations included:
- KeyBanc lowered its price target to $170 from $210, noting solid Cloud performance even as the Cloud migration benefit remained steady.
- TD Cowen trimmed its target to $140 from $175, highlighting 23% revenue growth and a slight improvement in organic subscription revenue.
- Barclays cut its target to $165 from $215, pointing to consistent Cloud migration and higher Cloud revenue guidance.
- Guggenheim established a new target of $190, down from $225, kept a Buy rating and cited 26% growth in the second quarter along with improved full-year guidance.
- Canaccord Genuity reduced its target to $185 from $230, calling attention to accelerated growth in Remaining Performance Obligation, which it viewed as evidence of stronger customer commitments.
Piper Sandler’s and other firms’ target adjustments reflect analysts’ assessments of Atlassian’s recent earnings and revenue trajectory. The cluster of revisions illustrates how market participants are re-pricing expectations for the cloud migration dynamics and subscription momentum that underpin Atlassian’s business model.
Summary of the situation - Atlassian reported a quarter that brokers generally labeled solid, with durable margins and mid‑teens to low‑twenties revenue growth, but the stock has nevertheless tumbled and several firms have reduced targets. Piper Sandler cut its target materially while emphasizing that the current valuation may already assume a downbeat long-term outlook.