Elastic’s Growth Potential Amid Challenges: Analyst Optimistic on AI and Large Customer Momentum

William Blair analyst Jake Roberge has maintained their bullish stance on ESTC stock, giving a Buy rating today.

Jake Roberge’s rating is based on several key factors that highlight Elastic’s potential for growth despite some challenges. The company reported mixed results, with strong overall revenue and profitability, although cloud revenue and initial fiscal 2026 guidance fell short of expectations. A significant factor affecting these results was the headwinds in the U.S. public sector, particularly within federal civilian agencies. However, the underlying demand trends remain healthy, and Elastic’s momentum with large customers and its GenAI initiatives are noteworthy.
Furthermore, Elastic’s recent go-to-market strategy changes have shown positive results, with an increase in $1 million-plus customers. While there is muted demand from small and medium-sized businesses, overall consumption is stable, and Elastic is benefiting from platform consolidation as customers shift more security and observability workloads to its platform. Despite the conservative guidance due to the variable macro environment and public sector challenges, Roberge remains optimistic about Elastic’s future, particularly its potential to capitalize on AI adoption in the coming years.

Roberge covers the Technology sector, focusing on stocks such as DocuSign, Adobe, and Workiva. According to TipRanks, Roberge has an average return of -5.5% and a 38.73% success rate on recommended stocks.

In another report released today, Barclays also maintained a Buy rating on the stock with a $105.00 price target.