Elastic (ESTC) AI Stock Analysis

• Market Cap: $6.36B
• Dividend Yield: N/A
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.62
• Revenue Growth: 16.98%
• EPS Growth: -265.85%
• Country: US
• Employees: 3,403
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.64
• Shares Outstanding: 105,372,800
• 10 Day Avg. Volume: 1,747,608
• 30 Day Avg. Volume: 1,252,637
• PEG Ratio: 0.31
• Price to Book (P/B): 9.64
• Price to Sales (P/S): 6.02
• P/FCF Ratio: 34.13
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 3.61
• Enterprise Value/Gross Profit: 4.78
• Enterprise Value/Ebitda: 164.04
• 1Y Price Target: $100.19
• Price Target Upside: 65.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 26
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: $65.00 ▲(7.65% Upside)

Elastic's overall stock score is driven by strong earnings call performance and positive corporate events, indicating strategic growth and shareholder value initiatives. However, the stock faces challenges in technical analysis and valuation due to bearish trends and negative profitability metrics. Addressing these areas could enhance the stock's attractiveness.

Positive Factors

Revenue growth & large customer commitments

Consistent top-line growth and rising contract commitments show durable demand for Elastic Cloud and subscriptions. Expansion of large-account commitments and CRPO growth support predictable recurring revenue, improved sales efficiency, and multi-year visibility for investment and margin scaling.

High gross margins

Very high gross margins reflect a scalable software and managed-cloud cost structure, enabling Elastic to invest in R&D and go-to-market while preserving unit economics. Such margins support long-term operating leverage once fixed sales and R&D costs are absorbed by growth.

Low leverage / stronger balance sheet

Material reduction in leverage provides financial flexibility for strategic investments, M&A, or buybacks without adding refinancing risk. A conservative capital structure makes the company more resilient to macro cycles and supports multi-quarter execution of cloud migration and product investments.

Negative Factors

Negative net profitability

Despite revenue growth and strong gross margins, persistent operating losses mean Elastic must convert gross profits into operating profitability. Continued negative margins constrain retained earnings, hurt ROE, and require either sustained margin expansion or structural cost reductions to achieve durable profitability.

Free cash flow growth weakness

A decline in free cash flow growth reduces the company’s internal funding for R&D, sales expansion, and capital returns. Lower FCF growth tightens the margin for error on strategic initiatives and increases reliance on operating improvements or external financing to sustain longer-term growth plans.

Billings lag and seasonality risk

Billings drive cash visibility and forward revenue recognition for subscription businesses. Persistent lagging billings, amplified by seasonality or atypical revenue timing, weaken forward revenue predictability and can mask real demand trends, challenging multi-quarter planning and cash conversion.

Elastic Business Overview & Revenue Model

Company Description

Elastic N.V., a search company, delivers technology solutions designed to run in public or private clouds in multi-cloud environments. It primarily offers Elastic Stack, a set of software products that ingest and store data from various sources and formats, as well as perform search, analysis, and visualization. The company's Elastic Stack product portfolio comprises Elasticsearch, a distributed, real-time search and analytics engine, and data store for various types of data, including textual, numerical, geospatial, structured, and unstructured; Kibana, a user interface, management, and configuration interface for the Elastic Stack; Beats, a single-purpose data shippers for sending data from edge machines to Elasticsearch or Logstash; Elastic Agent that offers integrated host protection and central management services; and Logstash, a data processing pipeline for ingesting data into Elasticsearch or other storage systems. It also provides software solutions on the Elastic Stack that address cases, including app search, workplace search, logging, metrics, application performance management, and synthetic monitoring. The company's platform solutions provide new capabilities that helps users to combine the benefits of the Elastic Stack. The company was incorporated in 2012 and is headquartered in Mountain View, California.

How the Company Makes Money

Elastic generates revenue primarily through a subscription-based model, offering various tiers of paid services that provide enhanced features and support. Key revenue streams include subscriptions for Elastic Cloud, which is the company's managed service offering, as well as on-premises software licenses and professional services such as training and consulting. The company also benefits from a growing user base that adopts its open-source products, leading to increased demand for premium features and support. Significant partnerships with cloud service providers and integration with other enterprise software systems further enhance its revenue potential, enabling Elastic to reach a broader market and drive sales growth.

Elastic Financial Statement Overview

Summary

Elastic demonstrates strong revenue growth and gross margins, but profitability remains a challenge with negative net income and EBIT margins. The balance sheet shows improved leverage, enhancing financial stability. Cash flow management is effective, though growth has slightly declined. Overall, Elastic is on a positive trajectory but needs to address profitability to enhance financial health.

Income Statement

Elastic shows a consistent revenue growth trend, with a TTM revenue growth rate of 3.75%. Gross profit margins are strong at 75.54% TTM, indicating efficient cost management. However, the company is still facing profitability challenges, as evidenced by negative net profit and EBIT margins. The net profit margin is -6.79% TTM, reflecting ongoing losses.

Balance Sheet

The balance sheet indicates a significant improvement in financial stability. The debt-to-equity ratio has decreased to 0.02 TTM, showing reduced leverage. However, the return on equity remains negative at -9.36% TTM, highlighting profitability issues. The equity ratio is stable, suggesting a solid asset base.

Cash Flow

Cash flow analysis reveals a slight decline in free cash flow growth at -3.71% TTM. The operating cash flow to net income ratio is 0.33, indicating a reasonable conversion of earnings to cash. The free cash flow to net income ratio is nearly 1, showing effective cash management despite net losses.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.48B	1.27B	1.07B	862.37M	608.49M
Gross Profit	1.10B	937.24M	772.36M	630.18M	447.44M
EBITDA	6.05M	-78.63M	-171.49M	-157.34M	-104.29M
Net Income	-108.11M	61.72M	-236.16M	-203.85M	-129.43M
Balance Sheet
Total Assets	2.59B	2.24B	1.74B	1.64B	973.17M
Cash, Cash Equivalents and Short-Term Investments	1.40B	1.08B	915.21M	860.95M	400.81M
Total Debt	595.01M	593.70M	594.23M	594.22M	28.18M
Total Liabilities	1.67B	1.50B	1.34B	1.23B	522.34M
Stockholders Equity	927.23M	738.18M	398.90M	415.43M	450.83M
Cash Flow
Free Cash Flow	261.82M	145.31M	32.98M	-1.75M	18.32M
Operating Cash Flow	266.17M	148.76M	35.66M	5.67M	22.55M
Investing Cash Flow	-118.67M	-287.96M	-272.95M	-127.27M	-1.52M
Financing Cash Flow	40.95M	40.05M	17.47M	602.13M	77.26M

Elastic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 60.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESTC, the sentiment is Negative. The current price of 60.38 is below the 20-day moving average (MA) of 70.40, below the 50-day MA of 73.04, and below the 200-day MA of 82.18, indicating a bearish trend. The MACD of -3.94 indicates Positive momentum. The RSI at 23.32 is Positive, neither overbought nor oversold. The STOCH value of 8.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESTC.

Elastic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NICE	71 Outperform	$6.64B	12.44	15.24%	―	9.46%	34.09%
PEGA	67 Neutral	$6.66B	26.60	51.96%	0.16%	17.00%	120.21%
ESTC	65 Neutral	$6.36B	-55.33	-12.84%	―	16.98%	-265.85%
CVLT	64 Neutral	$3.60B	42.15	34.48%	―	22.02%	-55.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KC	60 Neutral	$3.83B	-23.38	-15.88%	―	24.26%	55.58%
U	58 Neutral	$10.67B	-22.11	-13.64%	―	-8.23%	48.57%