Analyst Andrew Sherman from TD Cowen maintained a Hold rating on Elastic (ESTC – Research Report) and keeping the price target at $110.00.
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Andrew Sherman has given his Hold rating due to a combination of factors influencing Elastic’s current financial outlook. One key consideration is the anticipated revenue growth which is expected to be slightly above the company’s guidance, with particular emphasis on cloud growth. While there is modest optimism in cloud performance, growth in this segment is expected to be moderate due to a seasonal consumption pattern and recent go-to-market strategy changes that could impact cloud commitments in the latter half of the fiscal year.
Sherman’s analysis also highlighted the performance of Elastic’s self-managed revenue, which has shown consistent outperformance. However, the overall market expectations seem elevated due to previous strong performances, which could present challenges in maintaining the current momentum. Additionally, while there is increased interest in Elastic’s GenAI offerings, the willingness to pay for these services remains low, suggesting that while usage may rise, it may not significantly contribute to revenue growth in the near term.
According to TipRanks, Sherman is a 4-star analyst with an average return of 15.4% and an 86.11% success rate. Sherman covers the Technology sector, focusing on stocks such as Dynatrace, Procore Technologies, and Elastic.