Elastic’s Conservative FY26 Revenue Guidance and Market Conditions Justify Hold Rating

Analyst Koji Ikeda from Bank of America Securities reiterated a Hold rating on Elastic (ESTC – Research Report) and keeping the price target at $104.00.

Koji Ikeda has given his Hold rating due to a combination of factors surrounding Elastic’s financial outlook and market conditions. The company’s revenue guidance for FY26 appears somewhat conservative, with a projected growth of 12% year-over-year, which falls short of the market’s expectation of 13%. This cautious outlook may be attributed to anticipated demand softness in the US public sector and potential consumption headwinds in the latter half of FY26.
Furthermore, the new CFO’s first-quarter reporting and guidance setting could have introduced an additional layer of prudence, leading to a balanced risk/reward scenario. Despite these concerns, Elastic’s subscription revenue growth remains strong, and the company’s price objective suggests a 13% upside potential. However, until more data points confirm whether the conservative guidance is justified, maintaining a Neutral stance seems prudent.

According to TipRanks, Ikeda is a 5-star analyst with an average return of 12.4% and a 57.84% success rate. Ikeda covers the Technology sector, focusing on stocks such as Datadog, nCino, and Onestream, Inc. Class A.

In another report released yesterday, TD Cowen also reiterated a Hold rating on the stock with a $90.00 price target.