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    How Investors Are Reacting To Atlassian (TEAM) Cautious Growth Outlook

    Simply Wall St·11/13/2026 10:31:11
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    • Atlassian reported first quarter 2027 revenue of US$1,772.15m and net income of US$90.72m, with earnings per share turning positive on both a basic and diluted basis compared with losses a year earlier.
    • Alongside this profit shift, management issued cautious guidance on cloud and subscription growth and GAAP operating margins, which highlighted the cost and execution pressures of funding heavier AI initiatives and broader cloud adoption across the customer base.
    • We will look at how Atlassian's investment narrative is affected by cautious cloud growth guidance alongside a return to quarterly profitability.

    Compare Atlassian's reset expectations with other software players by scanning a curated list of 32 high quality undervalued stocks that may offer a similar mix of growth ambitions and profitability focus.

    Atlassian Investment Narrative Recap

    To own Atlassian, you need to be comfortable that the analyst consensus narrative on Simply Wall St around AI usage, cloud adoption and multi product collections can still feed subscription ARR over time, even with more modest near term expectations. The recent quarter showed the business generating US$1,772.15m of revenue and a return to net income of US$90.72m.

    The key short term swing factor now is whether cloud migrations and AI heavy products like Rovo translate into paid seat and ARR expansion fast enough to support the guided FY27 revenue growth profile. The biggest near term risk sits around slower subscription ARR guidance and the cost of AI investment pressuring GAAP margins.

    The most relevant fresh datapoint is management’s outlook for the second quarter and FY27. Atlassian guided Q2 revenue to US$1,825m to US$1,835m with a GAAP operating margin of about 4.5%, and for FY27 it expects around 13.75% revenue growth and a roughly 5% GAAP operating margin.

    Those figures matter because they frame how quickly AI and cloud usage need to translate into dollars for the story to hold. If migration cohorts, Rovo usage and Collections adoption track in line with these guardrails, the recent pullback looks more like an expectations reset than a change in the underlying operating thesis investors are betting on.

    Atlassian's narrative projects US$10.0b revenue and US$789.1m earnings by 2029, based on analysts assuming 14.9% yearly revenue growth and earnings rising by roughly US$843m from current earnings of a US$53.8m loss.

    Uncover why Atlassian's fair value indicates a 50% potential upside to its current price that could narrow quickly.

    NasdaqGS:TEAM 1-Year Stock Price Chart
    NasdaqGS:TEAM 1-Year Stock Price Chart

    Exploring Other Perspectives

    One alternate angle focuses on Atlassian’s AI monetisation risk rather than cloud growth. The most bearish analysts already modeled a slower 11.6% yearly revenue path and earnings of about US$698.1m by 2029, compared with US$789.1m in the consensus. Those lower forecasts show how sharply opinions can differ, and why fresh Q1 results and guidance may trigger meaningful narrative shifts.

    Explore 9 other Atlassian fair value estimates, including one that indicates there could be as much as 45% downside from the current price!

    Form Your Own Verdict

    Don't just follow the ticker. Dig into the data and build a conviction that's truly your own.

    Looking for more investment ideas beyond Atlassian?

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