Atlassian Corporation

Based on a comprehensive analysis of TEAM, the recommendation is to avoid buying at this time.

TEAM's technical picture is severely damaged, with the stock trading near 52-week lows after a 74% decline from its peak, reflecting extreme negative sentiment. While the company shows strong revenue growth and an impressive gross margin, it remains unprofitable with negative returns on equity and assets, and its liquidity position is concerning with a current ratio below 1.0. The valuation is challenging to assess due to negative earnings, but a high price-to-book ratio of 13.86 suggests the stock is priced for perfection despite its operational challenges.

The combination of persistent losses, weak technical momentum, and premium asset valuation creates significant risk without a clear near-term catalyst for a turnaround. Investors might consider waiting for concrete signs of sustainable profitability and a technical base formation before establishing a position.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the analysis, the 12-month outlook for TEAM is cautious. Key catalysts for a potential rebound would be a clear path to profitability, an improvement in its liquidity position, and a reversal of the severe negative technical trend. However, the primary risks are its persistent unprofitable operations, weak balance sheet, and the potential for further downside given the broken technical picture. Without a firm analyst target, the outlook suggests the stock is more likely to remain under pressure or trade sideways, with a successful re-test of recent lows being a critical level to watch.

Wall Street Consensus

Most Wall Street analysts are optimistic about Atlassian Corporation's 12-month outlook, with consensus target around $80.26, indicating expected upside potential.

Overall, TEAM has investment potential but also faces challenges. Here are key factors to weigh before investing.

TEAM has experienced severe underperformance with a dramatic selloff over the past year.

The stock shows catastrophic short-term performance, plummeting 32% over one month and 47% over three months, significantly underperforming the market by nearly 50 percentage points. This indicates extreme selling pressure and negative investor sentiment vastly exceeding broader market conditions. The stock is currently trading at its absolute lows, sitting just pennies above its 52-week low of $80.21, which represents a 74% decline from its 52-week high.

Based on its position at the very bottom of its annual range, the stock is deeply oversold on a technical basis. The extreme maximum drawdown of -73% further confirms the severity of the downtrend and exhausted selling pressure at current levels.

Revenue & Profitability TEAM demonstrated strong revenue growth with quarterly revenue increasing from $1.43 billion to $1.59 billion, representing sequential growth of approximately 11%. The company maintains an exceptionally high gross profit margin of 85%, though this has not translated to bottom-line profitability as both quarters show operating losses and negative net income margins. The net loss improved from -$51.9 million to -$42.6 million quarter-over-quarter, indicating some progress toward profitability.

Financial Health The company's liquidity position appears constrained with a current ratio of 0.89 and quick ratio of 0.89, both below the optimal level of 1.0. While the debt-to-equity ratio of 0.87 indicates moderate leverage, the negative interest coverage ratio of -3.89 suggests current operating losses cannot support debt service requirements. The cash conversion cycle of -36 days is favorable, indicating TEAM collects from customers before paying suppliers.

Operational Efficiency TEAM's operational metrics show challenges with negative returns across key measures: ROE of -2.7%, ROA of -0.7%, and ROCE of -1.6%. The asset turnover of 0.26 indicates relatively inefficient utilization of assets to generate revenue. However, the fixed asset turnover of 7.07 suggests reasonable efficiency in using property and equipment, though this is offset by high operating expenses relative to revenue generation.

Valuation Level: TEAM exhibits negative trailing and forward PE ratios, indicating the company is currently unprofitable, which makes traditional PE-based valuation assessments impractical. The negative EV/EBITDA ratio further confirms substantial operational losses. Given the absence of positive earnings metrics, the stock cannot be considered undervalued based on conventional profitability measures and carries significant valuation risk.

Peer Comparison: Without industry average data available, a contextual peer comparison cannot be conducted. However, TEAM's negative earnings multiples and elevated price-to-book ratio of 13.86 suggest it trades at a substantial premium to its asset value. This profile typically indicates high growth expectations priced into the stock, though the absence of industry benchmarks limits definitive relative valuation conclusions.

Volatility risk appears moderate based on a beta of 0.88, suggesting the stock is slightly less volatile than the broader market. However, the substantial 1-year maximum drawdown of -73.11% indicates significant downside volatility and potential for large losses during market downturns.

Other risks are notable, particularly the absence of reported short interest, which could suggest limited speculative activity or a potential lack of visibility into bearish sentiment. While this absence may cushion against short squeezes, it doesn't eliminate fundamental risks like operational challenges or market competition that could impact the stock.