Australian software-company Atlassian (TEAM -1.06%) specializes in productivity and team collaboration. It provides tools that help businesses plan, track, and complete projects more efficiently, a relevant value proposition across many different industries. But investors have turned bearish on Atlassian as the challenging economic climate has weighed on its business, and the stock is currently 68% off its high.

Atlassian has never seen its share price fall more sharply at any point in its history. Investors should treat the drawdown as a buying opportunity. Here's why.

The company is battling near-term headwinds

Atlassian reported mixed financial results in the first quarter of fiscal 2023 (ended Sept. 30), beating consensus estimates on the top line as revenue climbed 31% to $807 million. But it missed estimates on the bottom line, as non-GAAP earnings dropped 3% to $0.36 per diluted share. Management also provided second-quarter guidance that fell short of Wall Street's expectations, citing two headwinds related to customer growth.

For context, the company has a somewhat atypical go-to-market strategy. It relies on freemium pricing, self-service sales, and word-of-mouth marketing, rather than traditional sales and marketing tactics.

Generally speaking, that advantageous approach has kept sales and marketing costs low, enabling Atlassian to spend more on product development than its peers. But that go-to-market strategy is showing signs of weakness in the current economic environment.

Specifically, free accounts are converting to paid plans more slowly, and existing paid customers are adding new users more slowly. Both of those problems mean the company will see slower revenue growth in the near term.

On the bright side, management said product usage and churn haven't changed. That underscores the stickiness of its platform and points to the fact that growth should reaccelerate when economic conditions improve.

Atlassian should benefit from long-term tailwinds

The company offers a broad range of software products that target three interconnected markets:

  • Work management for technical teams (e.g. development and operations)
  • Work management for non-technical teams (e.g. marketing and human resources)
  • IT service management

All of those products are built on a single platform, which eliminates the cost and complexity of managing multiple-point solutions.

Moreover, Atlassian is the only vendor with a platform that connects technical and non-technical teams. It's also the only vendor with a platform that loops IT teams into the equation. That's beneficial for two reasons.

First, it means the company can drive collaboration and productivity across an organization, which is both imperative yet increasingly difficult in a digital-first world. Second, it can land customers through multiple departments, and then expand its relationship with those customers by providing software to other teams within the same organization. Ultimately, that makes its platform stickier than the point solutions provided by other vendors.

Atlassian has turned those competitive advantages into a strong position in several software markets. For instance, research specialist Gartner recently named it a leader in IT service management and enterprise agile planning software, while G2 recognized the company as a leader in product management, bug tracking, and knowledge management software. Better yet, G2 ranked it as the seventh-best global software seller in any product category in 2022, a distinction the company earned based on its strong market presence and high user-satisfaction scores.

In a nutshell, Atlassian offers a broad range of products that help businesses work more efficiently, and its software connects different business teams in a way that no other vendor can match. Additionally, it's atypical go-to-market strategy allows the company to invest more aggressively in product development than its peers. This should keep it at the forefront of its industry for years to come.

On that note, the company says its $29 billion addressable market is growing at 14% annually. That should be a powerful tailwind for the company in the long run. And with shares trading at 12.7 times sales -- a bargain compared to the three-year average of 28.4 times sales -- now is a great time to buy this growth stock.