William Blair analyst Arjun Bhatia has reiterated their bullish stance on TEAM stock, giving a Buy rating today.
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Arjun Bhatia has given his Buy rating due to a combination of factors including Atlassian’s strong start to its fiscal year, marked by healthy demand trends and accelerating cloud migrations. The company has shown resilience against the bear thesis concerning AI’s impact on developer seat reductions, with cloud revenue growth exceeding expectations for the third consecutive quarter. This growth is driven by enterprise expansion, AI adoption, and platform selling, which have positively influenced Atlassian’s financial outlook.
Furthermore, Atlassian’s Data Center customers are transitioning to the cloud at a faster pace than anticipated, doubling compared to the previous year, which has led to an increase in full-year revenue guidance. Despite the broader software sector’s concerns about AI risks, Bhatia believes these are overstated and sees Atlassian as well-positioned for continued growth, projecting over 20% growth in the coming years with robust free cash flow generation. The stock’s valuation, despite recent pullbacks, remains attractive, supporting the Buy recommendation.
In another report released today, Barclays also maintained a Buy rating on the stock with a $215.00 price target.