Elastic: Solid Execution but Lagging Cloud Momentum Keeps Shares Range-Bound at Hold

TD Cowen analyst Andrew Sherman has reiterated their neutral stance on ESTC stock, giving a Hold rating on February 25.

Andrew Sherman has given his Hold rating due to a combination of factors including solid overall execution but insufficient momentum in the key Cloud segment. While Elastic delivered a stronger-than-guided quarter with total revenue and subscription metrics ahead of expectations, much of the upside came from self-managed offerings rather than from Cloud, where growth modestly decelerated and the beat was smaller than bullish investors had hoped.

He also notes that remaining performance obligations were stable and net expansion trends held up, yet the near-term guidance, particularly for the fourth quarter, came in a bit softer than his team anticipated. With the stock already trading at what he views as low but likely range-bound valuation multiples, Sherman believes a re-rating would require a clearer acceleration in Cloud growth and more consistent upside, which he does not yet have conviction to underwrite ahead of the FY27 outlook, leading him to maintain a Hold stance and trim the price target.

According to TipRanks, Sherman is an analyst with an average return of -10.9% and a 27.66% success rate. Sherman covers the Technology sector, focusing on stocks such as Tyler Technologies, JFrog, and Elastic.

In another report released on February 25, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $61.00 price target.