Atlassian Corporation (TEAM): A Bull Case Theory

We came across a bullish thesis on Atlassian Corporation on Darius Dark Investing’s. In this article, we will summarize the bulls’ thesis on TEAM. Atlassian Corporation's share was trading at $173.87 as of September 15th. TEAM’s forward P/E was 39.37 according to Yahoo Finance.

Atlassian Corporation (TEAM) is a cornerstone of modern knowledge work, with its products Jira and Confluence deeply embedded in the workflows of over 300,000 companies, including NASA, Netflix, and Airbnb. Its software forms the backbone for collaboration, project management, and knowledge sharing, creating a sticky ecosystem that is difficult for customers to abandon. Despite this entrenched position, Atlassian’s shares have declined over 30% year-to-date, reflecting investor concerns over margin compression, intense competition, and a cautious forward outlook. The company faces multifaceted pressure from Microsoft’s integrated enterprise suite, GitLab’s end-to-end DevOps platform, and work management tools like Monday.com and Asana, challenging Atlassian across product, platform, and user-experience dimensions.

Originating from a $10,000 credit card bet by its founders, Atlassian pioneered a product-led growth model, reinvesting sales savings into engineering to build highly adoptable, low-friction tools. Its ecosystem expanded through cross-selling and the Atlassian Marketplace, fostering high switching costs and creating a durable economic moat. Today, Atlassian is executing a strategic pivot centered on AI, enterprise expansion, and enhanced collaboration. Its AI agent, Rovo, leverages proprietary “Teamwork Graph” data to deliver contextual intelligence across integrated products, while the Loom acquisition embeds asynchronous video capabilities to deepen engagement. Enterprise-focused bundles, along with FedRAMP authorization, position the company to capture high-value contracts and accelerate adoption.

Financially, Atlassian’s cloud revenue grew 25% year-over-year to $1.36 billion in Q3 FY2025, with $638 million in free cash flow, highlighting the strength of its underlying economics despite GAAP margin pressures from strategic investments. The stock, trading at a 29.7x Price-to-Free-Cash-Flow ratio, offers potential upside relative to intrinsic value. Atlassian represents a high-conviction investment in a company transforming into an AI-driven intelligent work platform, with long-term growth, robust cash generation, and a defensible moat, making the current share price an attractive entry point for patient investors.

Previously we covered a bullish thesis on Atlassian Corporation (TEAM) by Deep Value Returns in May 2025, which highlighted the company’s strong free cash flow, disciplined expense management, scalable business model, and guidance toward 20% CAGR through fiscal 2027. The company's stock price has depreciated approximately by 16.4% since our coverage. This is because broader market pressures weighed on valuation. The thesis still stands as TEAM’s resilient growth and cash generation remain intact. Darius Dark Investing shares a similar but emphasizes Atlassian’s strategic AI pivot and enterprise expansion.

Atlassian Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held TEAM at the end of the second quarter which was 82 in the previous quarter. While we acknowledge the potential of TEAM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.