Atlassian price increases show pricing power, says Citi

Citi says Atlassian (TEAM) announced price increases for its data center products, raising list prices for Jira Software, Confluence, Jira Service Management, effective February 11, and raising thresholds for unlimited user pricing. The magnitudes appear higher year-over-year, with averages of 23%-24% for each product well above last year’s less than 15% average list price increases, the analyst tells investors in a research note. Citi believes this, in conjunction with new tiers added between previous and updated unlimited thresholds, “read as a more aggressive slate of updates,” accompanying Atlassian’s concerted efforts to drive migration. The news validates Citi’s view that Atlassian “maintains robust pricing power,” contends Citi. It has a Buy rating on Atlassian with a $255 price target