Elastic’s Strategic Initiatives and GenAI Momentum Justify Buy Rating Despite Conservative FY26 Outlook

Wells Fargo analyst Andrew Nowinski maintained a Buy rating on Elastic (ESTC – Research Report) yesterday and set a price target of $120.00.

Andrew Nowinski has given his Buy rating due to a combination of factors influencing Elastic’s performance and future prospects. Despite a slight deceleration in Elastic Cloud revenue growth to 23% in 4Q25, the results were still considered solid, and the management’s guidance for FY26 was slightly below consensus due to conservative assumptions about macroeconomic conditions. The company anticipates that pressures observed in the U.S. public sector could extend to other areas of their business, which has been factored into their cautious outlook.
Additionally, Elastic is experiencing significant momentum from its GenAI initiatives, with a substantial number of Elastic Cloud customers utilizing these capabilities, which is expected to be a key growth driver in FY26. Furthermore, Elastic is expanding its focus on security by enhancing its sales team to capitalize on market consolidation opportunities, particularly in light of recent mergers and acquisitions in the sector. These strategic initiatives and growth drivers underpin Nowinski’s positive outlook on Elastic, justifying the Buy rating.

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

Based on the recent corporate insider activity of 56 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ESTC in relation to earlier this year.