Atlassian was founded in 2002 and is headquartered in San Francisco, California. It is a global tech company offering products like Jira for project management, Confluence for content sharing, Jira Service Management for team support, Loom for video collaboration and Rovo for organizational knowledge. Its platform connects teams, tools, and workflows, featuring collaboration, analytics, automation and AI.

Atlassian has recently acquired DX, investing approximately $1bn in cash and restricted stock to advance engineering intelligence capabilities for enterprises. DX will be fully integrated into Atlassian's suite, enabling enterprises to gain greater visibility into developer productivity and optimize their AI investments.

By combining DX’s data-driven analytics with Atlassian’s collaboration tools, organizations can address bottlenecks and achieve measurable improvements in developer experience and productivity. This strategic deal helps Atlassian deliver end-to-end solutions for over 300,000 customers, reinforcing its leadership in engineering intelligence for modern enterprise environments.

Improved gearing

Atlassian posted strong performance over FY 22-25, achieving a revenue CAGR of 23.0%, reaching $5.2bn in FY 25, driven by robust cloud adoption, accelerated AI innovation, expansion of its enterprise customer base, and strategic product launches. EBIT registered a CAGR of 23%, reaching minus $130m, with margins improving from minus 3.8% to minus 2.5%.

Over FY 22-25, the company experienced a rise in FCF from $266m to $1.7bn. CFO also rose from $883m to $1.5bn, with cash and cash equivalent increasing from $1.4bn to $2.5bn. This led to its gearing improving from 391.7% to 92.1%.

In comparison, Take-Two Interactive Software, Inc., a local peer, reported a lower revenue CAGR of 17.1% over FY 22-25, reaching $5.6bn in FY 25. However, EBIT dropped at a CAGR of minus 6.1% to minus $451m, with its margin contracting from +17.1% to minus 8%.

Robust stock returns

Over the past 12 months, the company's stock delivered negative returns of approximately 43.6%. In comparison, Take-Two Interactive's stock delivered returns of around 29.7% over the same period.

Atlassian is currently trading at an EV/EBIT multiple of 22.3x, based on FY 26 estimated EBIT of $1.6bn, which is lower than its 3-year historical average of 47.4x and Take-Two Interactive (54.9x).

Atlassian is liked by most of the analysts who cover it, with 25 having 'Buy' ratings and seven having 'Hold' ratings for an average target price of $245.2, implying 65.7% upside potential over the share's current price.

Consensus estimated revenue to rise at a CAGR of 18.9% to $8.8bn. EBIT to increase at a CAGR of 22.6% with margins expanding by 240bp to 27.1% over FY 25-28. In comparison, regarding Take-Two Interactive, analysts estimate a revenue CAGR of 17.8% and a EBIT CAGR of 62.5%.

Overall, Atlassian's strategic acquisitions, robust financial performance and strong analyst support position it well for future growth. Despite recent stock challenges, its innovative solutions and expanding enterprise base suggest significant upside potential, reinforcing its leadership in engineering intelligence for modern enterprises. However, the company faces risks like macroeconomic uncertainty, execution challenges, rising expenses, and revenue volatility, although remains resilient with strong free cash flow and no net debt.