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Elastic (ESTC)
NYSE:ESTC
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Elastic (ESTC) AI Stock Analysis

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ESTC

Elastic

(NYSE:ESTC)

Rating:69Neutral
Price Target:
$94.00
▲(5.96%Upside)
Elastic's overall score reflects strong financial performance and positive earnings call sentiment, tempered by valuation challenges and neutral technical indicators. The company's strategic focus on cloud and AI adoption positions it well for future growth, despite current profitability issues and macroeconomic uncertainties.
Positive Factors
Gen AI adoption
Elastic has demonstrated early momentum with gen AI, with over 2,000 customers utilizing the Elastic Cloud for gen AI use cases, significantly increasing from previous quarters.
Operating margin improvement
Elastic has improved its cost structure, leading to operating margin expansion, with a notable increase in operating margin from previous years.
Negative Factors
Revenue guidance shortfall
The FY26 revenue guidance of 12% year-over-year growth fell short of expectations, as the market anticipated 14% growth, influenced by ongoing macroeconomic headwinds and challenges in the US public sector.
U.S. public sector challenges
Elastic began to experience weakness in the U.S. public sector, particularly within Federal civilian agencies dealing with personnel and budget constraints, which is significant as it is one of the company's top five verticals.

Elastic (ESTC) vs. SPDR S&P 500 ETF (SPY)

Elastic Business Overview & Revenue Model

Company DescriptionElastic N.V. (ESTC) is a data analytics company that specializes in search-powered solutions. Founded in 2012, Elastic is best known for its Elastic Stack, a collection of open-source products that includes Elasticsearch, Kibana, Beats, and Logstash. These tools are designed to help organizations search, analyze, and visualize data in real-time, with applications in areas such as application search, site search, enterprise search, logging, and security analytics. Elastic operates in the technology and software sectors, catering to a wide range of industries including technology, healthcare, financial services, and government.
How the Company Makes MoneyElastic makes money primarily through a subscription-based revenue model. The company offers a range of subscription tiers for its Elastic Stack products, providing features like advanced security, alerting, machine learning, and dedicated support. These subscriptions are available in self-managed, cloud, and hybrid deployment options. Additionally, Elastic generates revenue through its Elastic Cloud service, a managed offering hosted on major cloud providers such as AWS, Google Cloud, and Microsoft Azure. Elastic also offers professional services, including training and consulting, which contribute to its revenue. Significant partnerships with major cloud providers help extend its market reach and customer base, enhancing its revenue-generating capabilities.

Elastic Key Performance Indicators (KPIs)

Any
Any
Subscription Customers
Subscription Customers
Tracks the total number of customers subscribing to Elastic's services, indicating the company's market penetration and potential for recurring revenue.
Chart InsightsElastic's subscription customer base has shown consistent growth, albeit at a slowing pace in recent quarters. This trend suggests market saturation or competitive pressures might be influencing growth rates. Without new insights from the earnings call, investors should monitor Elastic's strategic initiatives to reignite customer acquisition momentum and assess whether new product offerings or market expansions are on the horizon to sustain long-term growth.
Data provided by:Main Street Data

Elastic Earnings Call Summary

Earnings Call Date:May 29, 2025
(Q4-2025)
|
% Change Since: -3.61%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Positive
Elastic demonstrated strong revenue growth and substantial customer and AI adoption, supported by strategic partnerships. However, challenges in the U.S. public sector and a conservative outlook for fiscal year 2026 due to macroeconomic uncertainties present some concerns.
Q4-2025 Updates
Positive Updates
Strong Revenue Growth
Elastic reported a 16% year-over-year revenue growth for Q4, with total revenue reaching $388 million. Subscription revenue also grew 16%, and Elastic Cloud revenue increased by 23%.
Impressive Customer Metrics
Elastic ended the fiscal year with more than 1,510 customers spending over $100,000 annually and over 210 customers with more than $1 million in annual contract value.
Significant AI Adoption
Over 2,000 Elastic Cloud customers are using Elastic for GenAI use cases, with more than 310 customers spending over $100,000 annually. 25% of customers with over $1,000,000 in committed ACV are utilizing Elastic for GenAI initiatives.
Non-GAAP Operating Margin and Cash Flow
Elastic delivered a non-GAAP operating margin of 15% for Q4 and an adjusted free cash flow margin of 19% for the fiscal year.
Strategic Partnerships and Innovations
Elastic announced a new five-year strategic collaboration agreement with AWS and partnerships with Google and NVIDIA, enhancing its position in the AI and cloud markets.
Negative Updates
Pressure in U.S. Public Sector
Elastic experienced sales cycle elongation in the U.S. public sector, particularly impacting federal civilian agencies due to personnel and budget constraints.
Conservative Guidance
Elastic's guidance for fiscal year 2026 reflects a prudent approach, anticipating potential macroeconomic uncertainties and consumption headwinds, despite strong current demand signals.
Company Guidance
During the Elastic N.V. Q4 fiscal 2025 earnings call, the company reported exceeding guidance across revenue and profitability metrics, with a 16% increase in total revenue and a 23% rise in Elastic Cloud revenue. The non-GAAP operating margin reached 15%. The company ended FY 2025 with over 1,510 customers spending more than $100,000, and over 210 customers exceeded $1 million in committed annual contract value. The call highlighted strong growth in the adoption of their Elasticsearch AI platform, with over 2,000 Elastic Cloud customers utilizing it for GenAI use cases and more than 25% of customers with over $1 million in ACV engaging in GenAI initiatives. For FY 2026, Elastic anticipates total revenue between $1.655 billion and $1.670 billion, with a non-GAAP operating margin of approximately 16%. The company expects to maintain a strong free cash flow margin and will continue to focus on expanding sales capacity and developing innovative solutions.

Elastic Financial Statement Overview

Summary
Elastic is on a positive growth trajectory with strong revenue increases and improving cash flow management. Despite not yet achieving net profitability, the company maintains solid gross margins and reduced leverage, enhancing its financial stability.
Income Statement
75
Positive
Elastic has demonstrated strong revenue growth with a compound annual growth rate (CAGR) over the past five years. The gross profit margin remains robust, indicating effective cost management. However, the company has struggled to achieve net profitability, as reflected by negative net profit margins and EBIT margins, primarily due to high operational and R&D expenses typical in the software industry.
Balance Sheet
70
Positive
Elastic's balance sheet shows a solid equity position with a healthy equity ratio, contributing to financial stability. The company has significantly reduced its debt, leading to a low debt-to-equity ratio. However, the return on equity remains negative due to continuous net losses, suggesting room for operational improvements to enhance profitability.
Cash Flow
80
Positive
Elastic's cash flow from operations has improved markedly, demonstrating effective cash management and operational efficiency. The free cash flow has shown positive growth, indicating strong liquidity and the ability to fund expansion without additional debt. The operating cash flow to net income ratio suggests high quality of earnings, as cash flows exceed reported net income.
BreakdownJun 2025Jun 2024Jun 2023Jun 2022Jun 2021
Income Statement
Total Revenue1.48B1.27B1.07B862.37M608.49M
Gross Profit1.10B937.24M772.36M630.18M447.44M
EBITDA-54.70M-78.63M-171.49M-157.34M-63.49M
Net Income-108.11M61.72M-236.16M-203.85M-129.43M
Balance Sheet
Total Assets2.59B2.24B1.74B1.64B973.17M
Cash, Cash Equivalents and Short-Term Investments1.40B1.08B915.21M860.95M400.81M
Total Debt25.29M593.70M594.23M594.22M28.18M
Total Liabilities1.67B1.50B1.34B1.23B522.34M
Stockholders Equity927.23M738.18M398.90M415.43M450.83M
Cash Flow
Free Cash Flow261.82M145.31M32.98M-1.75M18.32M
Operating Cash Flow266.17M148.76M35.66M5.67M22.55M
Investing Cash Flow-118.67M-287.96M-272.95M-127.27M-1.52M
Financing Cash Flow40.95M40.05M17.47M602.13M77.26M

Elastic Technical Analysis

Technical Analysis Sentiment
Positive
Last Price88.71
Price Trends
50DMA
86.35
Positive
100DMA
87.50
Positive
200DMA
93.09
Negative
Market Momentum
MACD
0.70
Negative
RSI
60.68
Neutral
STOCH
82.25
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESTC, the sentiment is Positive. The current price of 88.71 is above the 20-day moving average (MA) of 85.50, above the 50-day MA of 86.35, and below the 200-day MA of 93.09, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 60.68 is Neutral, neither overbought nor oversold. The STOCH value of 82.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESTC.

Elastic Risk Analysis

Elastic disclosed 75 risk factors in its most recent earnings report. Elastic reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Elastic Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$10.15B22.7113.40%12.62%26.45%
77
Outperform
$9.92B50.1841.55%0.18%12.47%65.19%
74
Outperform
$7.44B99.0725.23%18.63%-55.09%
69
Neutral
$9.18B192.75-12.98%17.04%-273.13%
68
Neutral
$14.23B-14.15%-16.74%49.75%
61
Neutral
€9.27B16.993.87%1.81%4.19%-25.91%
59
Neutral
$4.30B-33.09%13.85%3.47%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ESTC
Elastic
88.71
-24.92
-21.93%
CVLT
CommVault Systems
167.14
44.90
36.73%
NICE
NICE
161.62
-20.18
-11.10%
PEGA
Pegasystems
58.08
23.68
68.84%
KC
Kingsoft Cloud Holdings
15.70
13.21
530.52%
U
Unity Software
33.34
17.16
106.06%

Elastic Corporate Events

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Elastic Appoints Navam Welihinda as New CFO
Positive
Feb 27, 2025

Elastic announced the appointment of Navam Welihinda as its new Chief Financial Officer, effective February 28, 2025, succeeding Eric Prengel. Welihinda, with a background at Grammarly and HashiCorp, is expected to lead Elastic’s finance function and contribute to its growth. In its third quarter of fiscal 2025, Elastic reported a 17% year-over-year increase in total revenue to $382 million and a 26% increase in Elastic Cloud revenue to $180 million, reflecting strong sales execution and market demand. The company also highlighted significant product innovations and received recognition as the AWS Global Generative AI Infrastructure and Data Partner of the Year 2024.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025