TEAM

Rating neutralAI Memo

Atlassian

As of 2026-05-12/Confidence medium

Open ticker Back to Memos

Data freshness

AI Memo

As of 2026-05-12 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

neutral

Confidence

medium

Horizon

—

Key catalyst

Q4 FY26 execution against raised outlook • 2026-06-30

Expected move: -22%

Biggest risk

The memo still leans cautious because forward visibility is not clean. Management explicitly cited macro and geopolitical uncertainty, free cash flow declined y/y in the quarter, cash and equivalents fell to about $1.1B from $2.7B at June 30, 2025, GAAP profitability remains pressured by restructuring, and the shareholder letter said Data Center growth should meaningfully decelerate in FY27 after pull-forward and end-of-life related benefits in FY26.

Invalidation

Break below $70 or thesis failure.

What would change my mind?

The primary-source read is fundamentally constructive: Q3 growth accelerated, cloud growth re-accelerated to 29%, RPO reached about $4.0B, management raised FY26 revenue expectations, and shareholder materials highlighted stronger enterprise, AI, and collections adoption with signs that Rovo usage correlates with faster ARR growth. The official May 6 Flex announcement also suggests Atlassian is trying to make enterprise AI adoption easier to monetize across a broader platform footprint.

Research note

Recommendation

neutral

Confidence

medium

As of

2026-05-12

Base target

$84

p=50%

Bull target

$102

p=25%

Bear target

$70

p=25%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Q4 FY26 execution against raised outlook
Teamwork Graph and Rovo deepen the AI context moat
Flex could widen enterprise wallet share

BearKey bullets

Free cash flow fell y/y in Q3 and the 10-Q said the decline was driven by lower operating cash flow, including higher cash paid to employees, vendors, restructuring-related items, and income taxes.
[#10-Q-2026-05-01]
GAAP operating margin was negative in Q3 and included sizable restructuring charges, so durable profitable growth still needs more proof beyond one strong quarter.

WatchKey bullets

The packet shows an anchor price of $87.31 versus a median target summary of about $174.19, but analyst target count is unavailable, so that gap cannot be treated as a strong valuation signal on its own.

Summary

High-level snapshot

Recommendation

neutral

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $84 (p=50%)

Bull/Bear spread: -5% / -35%

Vs latest close: Bull -5% · Base -22% · Bear -35%

Scenario probabilities

Bull Target: $102 (p=25%)Base Target: $84 (p=50%)Bear Target: $70 (p=25%)

Commentary

Primary-source and trusted-news tone improved after the April 30, 2026 print: Reuters reported Atlassian beat adjusted EPS expectations, raised annual revenue guidance, and shares rose after results. Even so, this remains a monitoring-style memo rather than a full bullish upgrade because analyst-revision breadth is not verified in the packet, the deterministic prior remains negative, and part of the strength reflects pull-forward and Data Center timing that management itself expects to normalize.

As of 2026-05-12 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Q4 FY26 execution against raised outlook
Teamwork Graph and Rovo deepen the AI context moat
Flex could widen enterprise wallet share

Scenarios

Bull Target (Scenario probability)

$102 / p=25% prob

Base Target (Scenario probability)

$84 / p=50% prob

Bear Target (Scenario probability)

$70 / p=25% prob

Price $108 as of 2026-05-29

Nearest Scenario: Bull (∆ 5%)

Targets vs latest close: Bull -5% · Base -22% · Bear -35%

Sentiment & Exposure

News Sentiment (30d)

0.35

Social Sentiment (7d)

0.00

Short-term Catalysts

Next few weeks

Q4 FY26 execution against raised outlook
2026-06-30
Atlassian’s April 30 earnings materials showed Q3 revenue up 32% y/y to $1.787B, cloud revenue up 29% y/y to $1.132B, RPO up 37% y/y to about $4.0B, and Q4 FY26 revenue guidance of $1.653B-$1.661B implying about 24% FY26 growth; a clean follow-through into the June quarter would support the stock, though management also flagged macro and geopolitical uncertainty. [#8-K-2026-04-30]
Prob 62% • Move 9% • Priced-in 60%

Long-term Catalysts

Months to a year

Teamwork Graph and Rovo deepen the AI context moat
2026-09-30
Company sources frame Teamwork Graph as the data intelligence layer behind Atlassian’s AI motion, unifying data across Atlassian and 100 popular apps and extending into browser, desktop, and terminal agent workflows; management tied stronger Rovo usage, Teamwork Collection adoption, and higher AI-credit consumption to faster customer ARR expansion in Q3. [#8-K-2026-04-30] [#IR-2026-05-TeamworkGraph]
Prob 44% • Move 10% • Priced-in 45%
Flex could widen enterprise wallet share
2026-12-31
On May 6, 2026 Atlassian introduced Flex, a new commercial model aimed at large enterprises that lets customers commit to a fixed wallet and flex usage across products, AI credits, Forge usage, and other platform services; if adoption is real, this can improve multi-product expansion and reduce budget friction. [#PR-2026-05-06-Flex]
Prob 38% • Move 12% • Priced-in 30%

Risks

Free cash flow fell y/y in Q3 and the 10-Q said the decline was driven by lower operating cash flow, including higher cash paid to employees, vendors, restructuring-related items, and income taxes. [#10-Q-2026-05-01]
GAAP operating margin was negative in Q3 and included sizable restructuring charges, so durable profitable growth still needs more proof beyond one strong quarter. [#8-K-2026-04-30]
Management said Q4 FY26 guidance reflects a prudent stance given macroeconomic and geopolitical uncertainty.
The AI monetization thesis depends on proving that Rovo, Teamwork Collection, and Flex convert into sustained wallet expansion rather than mostly narrative strength.
The shareholder letter said some purchasing and expansion activity was pulled forward into Q3, and Data Center revenue growth is expected to meaningfully decelerate in FY27 as Atlassian laps that benefit.

Peers

Symbol	Summary
ASAN	Asana is a more direct operating comparator than the packet’s broad same-sector peers because it competes in work management, project tracking, and cross-functional collaboration. It is smaller and less developer-centric than Atlassian, so it is most useful for reading demand and pricing sentiment in collaborative work management rather than for full platform-scale valuation.
MNDY	monday.com is a direct workflow and work-management SaaS comp: its Work OS overlaps with Jira and broader business-team use cases, while Atlassian has deeper developer, service-management, Confluence, and platform ecosystem exposure. Relative sentiment here helps benchmark enterprise work-management adoption and expansion risk.
GTLB	GitLab is a closer software-team and DevSecOps comparator than generic software-services names because it overlaps with developer workflow, planning, source-control, and AI-assisted software delivery discussions. It is not a full collaboration-suite comp, but it is relevant for the Jira, Bitbucket, and developer-toolchain portion of Atlassian’s thesis.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Analysis date: 2026-05-12

AI Stock Memo: TEAM - Atlassian - RankAlpha