Elastic (ESTC)
NYSE:ESTC
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Elastic
(NYSE:ESTC)
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Rating:63Neutral
Price Target:
$55.00
▲(27.02% Upside)
Action:ReiteratedDate:02/28/26
The score is driven primarily by improving financial quality (strong margins, positive free cash flow, and low leverage) and a constructive earnings-call outlook with raised guidance and strong backlog. These positives are tempered by weak technicals (downtrend with negative momentum) and limited valuation support due to negative earnings and no dividend.
Positive Factors
High gross margins & cash generation
Sustained high subscription gross margins (~82%) combined with materially positive adjusted free cash flow indicate durable unit economics and strong cash conversion. This supports reinvestment in product, R&D, and strategic initiatives while funding buybacks and reducing financing risk over the medium term.
Negative Factors
Ongoing net losses and negative ROE
Despite margin improvement and positive cash flow, continued GAAP net losses and negative returns on equity limit sustained profitability metrics and enterprise returns. This constrains the company's ability to deliver consistent reported earnings and reduces optionality for dividends or broader capital returns until GAAP profitability is sustained.
Read all positive and negative factors
Positive Factors
Negative Factors
High gross margins & cash generation
Sustained high subscription gross margins (~82%) combined with materially positive adjusted free cash flow indicate durable unit economics and strong cash conversion. This supports reinvestment in product, R&D, and strategic initiatives while funding buybacks and reducing financing risk over the medium term.
Read all positive factors
Elastic (ESTC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.48B
Dividend YieldN/A
Average Volume (3M)2.29M
Price to Earnings (P/E)224.7
Beta (1Y)1.43
Revenue Growth16.98%
EPS Growth-265.85%
CountryUS
Employees3,403
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.73
Shares Outstanding103,501,010
10 Day Avg. Volume1,284,671
30 Day Avg. Volume2,289,536
Financial Highlights & Ratios
PEG Ratio0.31
Price to Book (P/B)9.64
Price to Sales (P/S)6.02
P/FCF Ratio34.13
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.58
Enterprise Value/Gross Profit3.40
Enterprise Value/Ebitda57.10
Forecast
1Y Price Target
$84.37Price Target Upside94.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)2.52
Revenue Forecast (FY)$1.73B
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 an...
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...
Elastic Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyElastic Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 28, 2026
Earnings Call Sentiment Positive
The call conveyed strong execution: Elastic beat guidance, accelerated sales‑led subscription growth (21% YoY), crossed a $1B CRPO milestone, expanded AI customer penetration (2,700+ vector DB Cloud users, >3,000 total AI customers), delivered product milestones (Agent Builder GA, Jina rerankers, Cloud Connect) and maintained healthy margins (Q3 non‑GAAP operating margin 18.6%). Management raised full‑year revenue and sales‑led subscription guidance while prudently guiding Q4 due to a shorter quarter and seasonal cost timing. Near‑term concerns include a guided sequential pullback in sales‑led subscription for Q4, expected margin compression into Q4 (~14.5%), and CRPO growth that is robust but still in mid‑teens vs. the 20%+ inflection some expect. Overall, positive commercial momentum, AI adoption and product differentiation outweigh the limited near‑term seasonality and guidance conservatism.Positive Updates
Revenue Beat and Raised Full-Year Revenue Guide
Q3 total revenue of $450M, up ~18% year-over-year (16% constant currency); company beat the high end of guidance and raised full-year total revenue guide to $1.734B–$1.736B (~17% growth at midpoint, 15% cc).
Negative Updates
Q4 Sequential Revenue Headwind and Quarters with Fewer Days
Q4 guidance factors in a 3‑day shorter quarter, producing an estimated revenue headwind of ~$14M–$15M (~3%), and contributed to conservative Q4 guidance despite Q3 outperformance.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue Beat and Raised Full-Year Revenue Guide
Q3 total revenue of $450M, up ~18% year-over-year (16% constant currency); company beat the high end of guidance and raised full-year total revenue guide to $1.734B–$1.736B (~17% growth at midpoint, 15% cc).
Read all positive updates
Company Guidance
Elastic guided Q4 FY‑2026 total revenue of $445–447M (≈15% growth at the midpoint, 13% CC) and sales‑led subscription revenue of $371–373M (≈18% growth at the midpoint, 15% CC), with non‑GAAP operating margin ~14.5% and non‑GAAP diluted EPS $0.55–0.57 using 105.5–106.5M diluted shares; they raised full‑year FY‑2026 targets to total revenue $1.734–1.736B (~17% growth midpoint, 15% CC) and sales‑led subscription $1.434–1.436B (~20% growth midpoint, 18% CC), with full‑year non‑GAAP operating margin ~16.3% and non‑GAAP diluted EPS $2.50–2.54 using 107–108M shares. Management noted Q4 has three fewer days (a ~3% / $14–15M sequential revenue headwind), reaffirmed they expect FY‑2026 adjusted free cash flow margins to be in line with FY‑2025 (Q3 adj. FCF ≈ $54M, ~12% margin), and pointed to healthy forward visibility (CRPO ≈ $1.06B, +19% Y/Y; RPO +22% Y/Y) that underpins the guidance.Elastic Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
78
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 | Apr 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.68B | 1.48B | 1.27B | 1.07B | 862.37M | 608.49M |
| Gross Profit | 1.27B | 1.10B | 937.24M | 772.36M | 630.18M | 447.44M |
| EBITDA | 75.88M | 6.05M | -78.63M | -171.49M | -157.34M | -104.29M |
| Net Income | -84.52M | -108.11M | 61.72M | -236.16M | -203.85M | -129.43M |
Balance Sheet | ||||||
| Total Assets | 2.44B | 2.59B | 2.24B | 1.74B | 1.64B | 973.17M |
| Cash, Cash Equivalents and Short-Term Investments | 1.25B | 1.40B | 1.08B | 915.21M | 860.95M | 400.81M |
| Total Debt | 591.68M | 595.01M | 593.70M | 594.23M | 594.22M | 28.18M |
| Total Liabilities | 1.65B | 1.67B | 1.50B | 1.34B | 1.23B | 522.34M |
| Stockholders Equity | 790.99M | 927.23M | 738.18M | 398.90M | 415.43M | 450.83M |
Cash Flow | ||||||
| Free Cash Flow | 256.85M | 261.82M | 145.31M | 32.98M | -1.75M | 18.32M |
| Operating Cash Flow | 261.16M | 266.17M | 148.76M | 35.66M | 5.67M | 22.55M |
| Investing Cash Flow | 151.08M | -118.67M | -287.96M | -272.95M | -127.27M | -1.52M |
| Financing Cash Flow | -264.62M | 40.95M | 40.05M | 17.47M | 602.13M | 77.26M |
Elastic Technical Analysis
Negative
43.30
Price Trends
55.11
Negative
65.38
Negative
75.14
Negative
Market Momentum
-2.64
Positive
27.71
Positive
15.64
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 43.3 is below the 20-day moving average (MA) of 50.71, below the 50-day MA of 55.11, and below the 200-day MA of 75.14, indicating a bearish trend. The MACD of -2.64 indicates Positive momentum. The RSI at 27.71 is Positive, neither overbought nor oversold. The STOCH value of 15.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.27B | 11.53 | 16.44% | ― | 9.46% | 34.09% | |
71 Outperform | $6.66B | 25.92 | 60.07% | 0.16% | 17.00% | 120.21% | |
63 Neutral | $4.48B | 224.68 | -9.44% | ― | 16.98% | -265.85% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $4.57B | ― | -13.37% | ― | 24.26% | 55.58% | |
57 Neutral | $3.91B | 77.74 | 31.15% | ― | 22.02% | -55.25% | |
56 Neutral | $9.36B | ― | -12.57% | ― | -8.23% | 48.57% |
* Technology Sector Average
ESTC
Elastic
43.30
-36.53
-45.76%
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NICE
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PEGA
Pegasystems
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KC
Kingsoft Cloud Holdings
15.11
0.89
6.26%
U
Unity Software
21.62
2.39
12.43%
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.