TD Cowen lowered its price target on Atlassian (NASDAQ:TEAM) to $250 from $320, keeping a Hold rating in place ahead of the company’s upcoming fiscal third-quarter earnings on May 1.

While partner checks reflected steady win rates and continued pricing benefits, the firm flagged growing caution around IT spending and shifts in partner structures. TD Cowen remains optimistic about Atlassian’s cloud and enterprise momentum but sees short-term instability in small business segments and data center migration activity.

Although the firm expects a modest beat in the third quarter and little change to full-year guidance, it sees limited near-term upside. With shares down roughly 35% since February highs, valuation has become more compelling—now around 30x expected 2026 free cash flow.

However, macroeconomic uncertainty and unresolved questions around AI monetization could intensify investor debates on whether Atlassian can achieve 20%+ growth in 2026.

TD Cowen’s updated $250 target implies a multiple of 38x on 2026 free cash flow, reflecting broader sector devaluation pressures.