01. Atlassian Corporation (NASDAQ:TEAM)
Average Analyst Share Price Target Upside: 48.26%
Average Analyst Share Price Target: $217.69
Atlassian Corporation (NASDAQ:TEAM) is poised for significant long-term growth, driven by its innovative workplace collaboration tools and the recent introduction of AI-powered features that are rapidly gaining traction among its users. With popular platforms like Jira and Confluence, Atlassian Corporation (NASDAQ:TEAM) has established itself as a leader in helping organizations manage workflows and boost productivity. The launch of Atlassian Intelligence, a suite of AI tools designed to enhance Jira and Confluence, is a key growth catalyst. These tools, including AI-powered search functions and virtual agents, are already being adopted by 30,000 of Atlassian’s 300,000 customers. This rapid adoption underscores the effectiveness and utility of these new features in improving efficiency and reducing the need for human intervention, as evidenced by FanDuel’s 85% reduction in support tickets requiring human attention.
Atlassian Corporation (NASDAQ:TEAM) financial performance in Q3 2024 further solidifies its bullish outlook. The company reported a 30% year-over-year revenue increase to a record $1.19 billion, with cloud revenue growing by 31% and data center revenue by 64%. This growth is particularly notable given Atlassian Corporation’s (NASDAQ:TEAM) strategic shift towards more controlled spending, which resulted in a net income of $12.7 million—a significant improvement from the previous year’s loss.
Despite trading 63% below its all-time high, Atlassian Corporation (NASDAQ:TEAM) is on track to achieve over $4 billion in revenue for fiscal 2024 and aims to more than double this figure within the next five years. The company’s addressable market, valued at $67 billion, continues to expand, and AI could further unlock new opportunities for growth. Wall Street’s consensus reflects this optimism, with the majority of analysts rating Atlassian Corporation (NASDAQ:TEAM) as a buy or overweight, and none recommending selling. Given its strong market position, innovative product offerings, and robust financial performance, Atlassian Corporation (NASDAQ:TEAM) presents a compelling long-term investment opportunity as it continues to lead in the workplace collaboration space.
Artisan Mid Cap Fund stated the following regarding Atlassian Corporation (NASDAQ:TEAM) in its first quarter 2024 investor letter:
“Among our top detractors were Atlassian Corporation (NASDAQ:TEAM), ON Semiconductor and Exact Sciences. Atlassian’s earnings results met expectations for cloud revenue growth. However, this was insufficient for investors to support the stock’s momentum after strong recent performance. While parts of its cloud business, such as enterprise, are exceeding expectations, there are signs of weakness among small- and medium-sized companies, where pressures persist in paid seat expansions. We trimmed the position due to valuation concerns; however, we remain bullish in the longer term and are building conviction around its ability to leverage generative AI to drive accelerated cloud revenue growth.”
While we acknowledge the potential for TEAM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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