Atlassian Stock To $118?

Atlassian (TEAM) stock has jumped 6.2% during the past day, and is currently trading at $168.71. Our machine-driven multi-factor assessment suggests that it may be time to reduce exposure to TEAM stock. We are primarily concerned current valuation and a price of $118 may not be out of reach. We believe there is not much to fear in TEAM stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

TEAM stock has jumped meaningfully recently and we currently find it relatively expensive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Let us ask you this: Over the last 5 years, which index do you think the Trefis High Quality Portfolio outperformed – the S&P 500, S&P 1500 Equal Weighted, or both? The answer might surprise you. See how our advisory framework helps stack the odds in your favor.

Let’s get into details of each of the assessed factors but before that, for quick background: With $44 Bil in market cap, Atlassian provides software solutions for workflow management and remote collaboration, including tools that help teams plan, track, organize, and manage projects and content virtually.

[1] Valuation Looks Very High

This table highlights how TEAM is valued vs broader market. For more details see: TEAM Valuation Ratios

[2] Growth Is Very Strong

• Atlassian has seen its top line grow at an average rate of 23.0% over the last 3 years
• Its revenues have grown 20% from $4.4 Bil to $5.2 Bil in the last 12 months
• Also, its quarterly revenues grew 22.3% to $1.4 Bil in the most recent quarter from $1.1 Bil a year ago.

This table highlights how TEAM is growing vs broader market. For more details see: TEAM Revenue Comparison

[3] Profitability Appears Very Weak

• TEAM last 12 month operating income was $-130 Mil representing operating margin of -2.5%
• With cash flow margin of 28.0%, it generated nearly $1.5 Bil in operating cash flow over this period
• For the same period, TEAM generated nearly $-257 Mil in net income, suggesting net margin of about -4.9%

This table highlights how TEAM profitability vs broader market. For more details see: TEAM Operating Income Comparison

[4] Financial Stability Looks Very Strong

• TEAM Debt was $1.2 Bil at the end of the most recent quarter, while its current Market Cap is $44 Bil. This implies Debt-to-Equity Ratio of 2.8%
• TEAM Cash (including cash equivalents) makes up $2.9 Bil of $6.0 Bil in total Assets. This yields a Cash-to-Assets Ratio of 48.6%

[5] Downturn Resilience Is Moderate

TEAM saw an impact slightly worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• TEAM stock fell 74.6% from a high of $458.13 on 29 October 2021 to $116.34 on 22 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $322.94 on 10 February 2025 , and currently trades at $168.71

2020 Covid Pandemic

• TEAM stock fell 21.9% from a high of $154.42 on 14 February 2020 to $120.57 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 30 April 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read TEAM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.