Why Morgan Stanley still believes in Atlassian after the sell-off

Résumé détaillé

Morgan Stanley's software team, including analyst Adam Wood, called the sell-off "an expectations reset." The team believes the business is still in solid shape. And they pointed…

Atlassian (TEAM) recently saw its stock drop by almost 18% in five trading sessions. And the company's shares closed at $156.60 on Friday, Nov. 6. Meanwhile, the stock had traded above $204 as recently as Oct. 29.

The drop came right after Atlassian released its first-quarter fiscal 2027 earnings on Nov. 5. The results were solid, but the company's forward guidance worried investors. That was why the stock fell.

The stock had been climbing since the summer, and any disappointment in the results was expected to send shares lower.

However, even with the drop, Morgan Stanley took a different view from others. In a Morgan Stanley report shared with me, titled "1Q27 Results – Expectations Reset, Fundamentals Intact," the firm kept its Overweight rating and $180 price target on the stock.

To Morgan Stanley, the sell-off is simply a reset in expectations after months of strong gains.

Atlassian makes software that teams in workplaces use every day. It has two main products, Jira and Confluence. Jira helps teams track their projects and tasks. Confluence is where teams store shared documents and notes.

Atlassian also has newer tools like Rovo that bring AI features into Jira and Confluence. Companies pay Atlassian to use its software on a per-user basis, so the company's growth depends on working with more businesses and signing up more customers.

In Atlassian's first-quarter results for fiscal 2027, the company's cloud revenue grew 30.5% year over year to $1.302 billion. According to Barron's, that beat Wall Street's expectations by 1.5%.

While overall performance remained healthy, the cloud segment's revenue beat represented its narrowest outperformance relative to consensus estimates since Q3 2025, tempering expectations among investors accustomed to wider margins.

Début de l'article, extrait de Yahoo Finance. Pour lire la suite, ouvrez l'article chez le média.