TRADE ALERT: Buy Atlassian

Atlassian's raised guidance and expanding profitability make it an attractive buy at 41x next year's free cash flow, targeting $510 by summer 2026.

Investment Thesis

Atlassian (TEAM) is back on its front foot. Not only has Atlassian raised its guidance for the second time in fiscal 2025, but more importantly, it continues to expand its profitability profile.

I've used conservative estimates throughout and I believe that TEAM is being priced at 41x next year's free cash flow, despite investing heavily in the coming 12 months.

Paying 41x next year's free cash flow (including the after-hours jump in the share price) appeals to me a lot.

I can see the stock reaching a price target of $510 by summer 2026.