TD Cowen has reduced its price target for Elastic (ESTC, Financial) from $125 to $105 while maintaining a Hold rating. The firm anticipates a slight increase in Cloud segment growth but expects the 2026 guidance to fall just short of market expectations.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for Elastic NV (ESTC, Financial) is $128.94 with a high estimate of $160.00 and a low estimate of $91.00. The average target implies an upside of 36.92% from the current price of $94.17. More detailed estimate data can be found on the Elastic NV (ESTC) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, Elastic NV's (ESTC, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Elastic NV (ESTC, Financial) in one year is $119.83, suggesting a upside of 27.25% from the current price of $94.17. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Elastic NV (ESTC) Summary page.
ESTC Key Business Developments
Release Date: February 27, 2025
- Total Revenue: $382 million, up 17% year over year.
- Subscription Revenue: $358 million, up 16% year over year.
- Elastic Cloud Revenue: $180 million, growing 26% year over year.
- Professional Services Revenue: $24 million, growing 18% year over year.
- Non-GAAP Operating Margin: 16.8% of revenue.
- Gross Margin: 76.7%.
- Diluted Earnings Per Share: $0.63.
- Adjusted Free Cash Flow: Approximately $99 million, translating to a 26% margin.
- Customers with ACV over $100,000: Over 1,460.
- Net Expansion Rate: Approximately 112%.
- Q4 Revenue Guidance: $379 million to $381 million, representing 13% year over year growth at the midpoint.
- Full Fiscal Year Revenue Guidance: $1.474 billion to $1.476 billion, representing 16% year over year growth at the midpoint.
- Full Fiscal Year Non-GAAP Operating Margin Guidance: Approximately 14.7%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Elastic NV (ESTC, Financial) reported a 17% year-over-year increase in total revenue, with cloud revenue growing by 26%.
- The company saw a significant increase in customers spending over $100,000, reaching over 1,460, demonstrating strong customer engagement.
- Elastic NV (ESTC) signed multiple seven-figure deals, including a notable contract with a digital native career platform, showcasing its competitive edge.
- The company is experiencing strong momentum in its GenAI applications, with over 1,750 Elastic Cloud customers using these solutions.
- Elastic NV (ESTC) achieved a non-GAAP operating margin of 16.8%, exceeding expectations and reflecting strong financial discipline.
Negative Points
- Elastic NV (ESTC) faced sales execution issues in Q1 due to field segmentation changes, which impacted early fiscal year performance.
- The company anticipates a sequential revenue headwind of approximately $10 million in Q4 due to having three fewer days in the quarter.
- Elastic NV (ESTC) is cautious about the sustainability of its Q3 cloud strength and has provided prudent guidance for Q4.
- The self-service cloud business, targeted at SMBs, remained flat, indicating challenges in this market segment.
- The company faces potential headwinds from the recent strength of the US dollar, impacting revenue by an estimated $1 to $2 million.
