A Fourth Bank Just Cut Atlassian’s Target. What Happens to Migrating Customers Complicates It

Key Stats for Atlassian Stock

• Current Price: $85.40
• Target Price (Mid): ~$139
• Street Target: ~$140
• Potential Total Return: ~63%
• Annualized IRR: ~13% / year

Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free) >>>

What Happened?

Atlassian Corporation (TEAM) closed at $85.40 on July 22, down 5.74%, extending a decline that began the previous session. BofA Securities analyst Koji Ikeda cut his price target to $105 from $110 on July 20 and kept a Neutral rating. He now models fiscal 2027 revenue at $7,174 million against a Street consensus he puts at $7,373 million, a gap of 2.7%, after trimming FY27 by 4.3% and FY28 by 4.1%. TIKR’s own consensus for FY27 sits at $7,369.51 million, implying 13.7% growth.

He was the fourth firm to move since June 25. BMO cut to $95 from $105 that day, KeyBanc went to $115 from $130 on July 8, and Raymond James trimmed FY27 estimates while keeping Outperform.

The cuts do not share one cause. BMO and BofA both cite weaker data center revenue. KeyBanc did the reverse, raising its data center forecast while lowering cloud migration and organic growth assumptions. What they share is a conclusion about fiscal 2027, not a diagnosis.

The shrinking data center line is a settled fact. Atlassian retires the self-hosted product on March 28, 2029, and stopped selling new subscriptions in March 2026, per the company’s investor relations materials.

What Happens to a Customer Who Actually Migrates

Speaking at Mizuho’s Technology Conference on June 10, Head of Investor Relations Martin Lam gave the number: “93% of those data center customers, when they migrate, they migrate to the higher-level editions.” Not lateral moves. Upgrades to cloud premium and cloud enterprise tiers.

Lam described the compounding that follows. More products available to cross-sell. Users added without IT provisioning. Higher-tier upsell paths that did not exist on-premise. Customers adopting the Teamwork Collection bundle add roughly 10% more users than their original Jira footprint.

That does not refute BofA. A revenue line can decline while the customers inside it upgrade, and both statements can hold through fiscal 2027. It does mean the reported number and the customer base are telling different stories, and only one of them shows up in a model.

The operating record supports the second story. Q3 FY2026 revenue of $1,786.97 million beat consensus by 5.24%, adjusted EPS of $1.75 beat by 30.99%, and EBITDA of $617.17 million beat by 22.49%.

See historical and forward estimates for Atlassian stock (It’s free!) >>>

The Billion-Dollar Business Inside the AI Debate

Jira Service Management, Atlassian’s IT and business service desk product, now sold as Service Collection, passed $1 billion in annual recurring revenue and grows above 30% year over year.

Two details from the same June 10 session complicate the disruption thesis. Roughly 60% of Jira Service Management instances now serve non-IT workflows, meaning HR, legal, and facilities rather than help desks. And about 40% of all agentic invocations across Atlassian’s platform happen inside Service Collection. Read the second figure carefully: it shows where agents are deployed, which is not the same as where customers chose to put them.

On pricing, Lam said Jira runs “like $8 per user per month” and described Atlassian as taking value in being a high-value provider at a lower price point, positioning he expects to matter as competitors reprice.

Two outside data points landed this summer. Gartner named Atlassian a Leader in its inaugural Magic Quadrant for Developer Productivity Insight Platforms on June 25, citing Ability to Execute and Completeness of Vision among 12 vendors. And Atlassian Ventures took a strategic stake in Rocketlane on July 7, a platform Atlassian already uses internally. The amount was not disclosed, so it reads as a direction, not a number for a model.

A Discount That Still Requires Something to Go Right

Atlassian trades at 3.07x NTM enterprise value to revenue and 10.67x NTM EV/EBITDA. Salesforce sits at 3.49x and 9.50x, SAP at 3.69x and 11.32x, Workday at 2.94x and 8.97x, and Oracle at 5.64x and 10.07x. On forward earnings, Atlassian is at 14.32x against Salesforce at 11.70x, Workday at 11.91x, Oracle at 15.63x, and SAP at 17.69x. Against that group, it is cheap on revenue and roughly mid-pack on earnings, while carrying an 84.8% LTM gross margin above all four.

The discount is not unearned. Atlassian remains GAAP unprofitable at negative $0.83 LTM diluted EPS, with ROIC at 2.4% and stock-based compensation heavy enough that management named moderating it a priority for next year. Citizens found more customer complaints than praise. Those are real, and they are the reason the multiple sits where it does.

What has not been tested is Flex, the fixed-wallet contract structure introduced in early May that lets large enterprises add products without returning to procurement each time. Lam was explicit that it remains a beta program with a handful of customers. A contract structure in testing, not a revenue line.

See how Atlassian performs against its peers in TIKR (It’s free!) >>>

TIKR Advanced Model Analysis

• Current Price: $85.40
• Target Price (Mid): ~$139
• Potential Total Return: ~63%
• Annualized IRR: ~13% / year

See analysts’ growth forecasts and price targets for Atlassian stock (It’s free!) >>>

Using the mid case, the model values Atlassian at around $139 by June 2030, roughly 63% total return, and about 13% annualized. It assumes revenue compounding near 15% and net margin expanding toward 25% from 17.5%.

The two revenue drivers are migration mix, as data center customers land on premium cloud editions with longer cross-sell runways, and enterprise penetration into the 350,000-customer base, where 85% of the Fortune 500 are already customers but account for roughly 10% of revenue.

The margin driver is operating leverage as research spending grows more slowly than revenue following the March restructuring. The primary risk is multiple compression, which the model itself forecasts at a negative 13.2% CAGR, meaning Atlassian can execute and still return little.

Upside: Service Collection and premium-tier migrations compound faster than data center revenue declines. Downside: the FY2027 trough extends into FY2028, and four banks cutting now prove early rather than wrong.

The model’s ~$139 sits near the Street’s ~$140 mean. Two estimates built on different assumptions, not a confirmation of either.

Conclusion

Atlassian reports fiscal fourth quarter and full year results after the close on Thursday, August 6, and issues its first FY2027 guidance.

Every cut since June 25 has been a guess at that number. BofA modeled $7,174 million. TIKR’s consensus sits at $7,369.51 million. Guidance at or above consensus means four banks repriced the business on an assumption that management just contradicted. Guidance near BofA’s figure or below means the cuts were early reads, and the data center decline is outrunning what the migration mix replaces.

One number, one evening, and no way to know before then.

See what stocks billionaire investors are buying so you can follow the smart money with TIKR.

Should You Invest in Atlassian?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Atlassian, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Atlassian alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

Analyze Atlassian on TIKR Free →

Looking for New Opportunities?

Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!