Scorching inflation has hit the economy hard this year, causing the Federal Reserve to raise interest rates at the most aggressive pace since the 1980s. Many investors have responded by selling stocks, sending the market into a nosedive. But in some cases, Wall Street analysts think the selling has gone too far.

For instance, 20 analysts currently have price targets on Atlassian (TEAM 1.15%), and the most bearish estimate is $147 per share. That implies 24% upside from its current share price. Similarly, 18 analysts have price targets on Paycom Software (PAYC -1.04%), and the most bearish estimate is $345 per share. That implies 9% upside from its current share price. In other words, Wall Street sees no downside for shareholders.

Unfortunately, there is no such thing as a risk-free stock. Downside is always a possibility. But the optimistic consensus among analysts is still noteworthy. Here is what investors should know about Atlassian and Paycom.

Atlassian: Team collaboration and productivity software

Software company Atlassian delivered underwhelming results in the first quarter of fiscal 2023 (ended Sept. 30, 2022). Revenue increased 31% to $807 million, but non-GAAP earnings dropped 3% to $0.36 per diluted share. That figure fell short of the consensus estimate on Wall Street, as did the second-quarter guidance provided by management, sending shares sharply lower. In fact, Atlassian stock is currently 74% off its high.

That said, the growth story has not changed, and the investment thesis remains solid. Atlassian has a strong market position in team collaboration and productivity software, due in large part to the immense popularity of its Jira suite. In fact, research firm Gartner recently ranked Atlassian as a leader in enterprise agile planning tools, which help organizations manage individual projects from a big picture perspective. And Forrester Research and Gartner have both recognized the company as a leader in IT service management software.

Also noteworthy, Atlassian offers a broad portfolio of integrated products, ranging from work management tools (project planning, tracking, and collaboration) to IT support and enterprise-level planning solutions. That means businesses can replace multiple point solutions with the Atlassian platform. In fact, the company recently announced Atlassian Together, which bundles all of its work management products into one subscription.

Looking ahead, Atlassian may continue to struggle in the near term, but long-term investors have good reason to be optimistic. In 2022, Atlassian ranked as the seventh-best software company in the world, according to G2, a research firm that scores software vendors based on user satisfaction and market presence. That puts Atlassian in rarified air.

On that note, management puts its addressable market at $29 billion, and that figure is growing at about 14% annually. With shares trading at 10 times sales, the cheapest valuation in the past three years, patient investors should seriously consider buying this growth stock.

Paycom Software: Human capital management software

Paycom provides human capital management (HCM) software. Its platform unifies tools for talent acquisition, scheduling, training, payroll, and human resources (HR), helping businesses manage their employees from recruitment through retirement.

More importantly, Paycom delivers its software from the cloud, and its HCM suite is built on a single system of record, meaning administrators only need to maintain one database. Those qualities give Paycom an edge in the market. Most organizations rely on multiple HCM vendors, which often leads to integration challenges and more work for administrators.

Earlier this year, Fast Company named Paycom one of the most innovative companies in the world. That recognition stems from its self-service payroll software. The product, nicknamed Beti (Better Employee Transaction Interface), is the first of its kind in the HCM industry. Beti requires employees to review and approve their paychecks prior to payout, which leads to fewer errors and less work for administrators.

Financially, Paycom is growing at an impressive clip. Third-quarter revenue jumped 30% to $334 million and earnings soared 73% to $0.90 per diluted share. Better yet, investors have good reason to believe that momentum will continue. Paycom has captured just 5% of its addressable market, according to CEO Chad Richison, but its HCM software allows businesses to manage every aspect of the employee lifecycle from a single platform. That value proposition coupled with Paycom's capacity for innovation should keep it at the forefront of the HCM industry.

With that in mind, shares currently trade at a reasonable 14.3 times sales, a good deal cheaper than the three-year average of 22.2 times sales. That creates a buying opportunity, though investors should remember that every stock bears downside risk, even if price targets on Wall Street suggest otherwise.