Elastic (ESTC) AI Stock Analysis

• Market Cap: $9.13B
• Dividend Yield: N/A
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 192.8
• Beta (1Y): 1.44
• Revenue Growth: 17.42%
• EPS Growth: -228.98%
• Country: US
• Employees: 3,403
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.60
• Shares Outstanding: 106,270,940
• 10 Day Avg. Volume: 1,519,157
• 30 Day Avg. Volume: 2,178,118
• 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: 0.87
• Enterprise Value/Revenue: 5.13
• Enterprise Value/Gross Profit: 6.83
• Enterprise Value/Ebitda: 240.15
• 1Y Price Target: $120.70
• Price Target Upside: 40.43% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

• Rating: 65 Neutral
• Price Target: $92.00 ▲(7.04% Upside)

Elastic's strong earnings call performance, with significant revenue growth and raised guidance, is a major positive factor. However, ongoing profitability challenges and a negative P/E ratio weigh on the valuation. Technical indicators suggest a neutral trend, and while cash flow management is strong, profitability remains a concern.

Positive Factors

Revenue Growth

Elastic's strong revenue growth indicates robust demand for its products, particularly in AI and security, supporting long-term business expansion.

Cash Flow Management

Strong cash flow management enhances Elastic's ability to invest in growth opportunities and maintain financial stability, supporting sustainable operations.

Market Position in Security

Elastic's competitive success in the security market strengthens its market position, enhancing its ability to capture market share and drive future growth.

Negative Factors

Profitability Challenges

Ongoing profitability challenges, reflected in negative net margins, could hinder Elastic's ability to reinvest in growth and affect long-term financial health.

Complex Macro Environment

A complex macro environment poses risks to Elastic's growth trajectory, potentially affecting demand and operational stability in the medium term.

U.S. Public Sector Challenges

Challenges in the U.S. public sector could limit Elastic's growth opportunities in this segment, impacting overall revenue diversification and stability.

Elastic Business Overview & Revenue Model

Company Description

Elastic N.V. (ESTC) is a technology company that specializes in search and data analytics solutions. Founded in 2012, the company is known for its open-source search engine, Elasticsearch, which is a part of the Elastic Stack, including tools like Kibana, Beats, and Logstash. Elastic provides its products across various sectors, enabling businesses to perform real-time search, logging, and analytics across large volumes of data. Its offerings cater to developers, data analysts, and IT operations teams, making it a critical player in the fields of enterprise search, observability, and security.

How the Company Makes Money

Elastic generates revenue primarily through subscription-based models that offer access to its commercial offerings, including advanced features and support associated with its Elastic Stack products. Key revenue streams include subscriptions for Elastic Cloud, which provides a managed service for Elasticsearch, and license fees for on-premises deployments. Additionally, the company earns revenue through professional services, including training and consulting. Strategic partnerships with cloud providers such as AWS, Google Cloud, and Microsoft Azure enhance its market reach and contribute to its earnings by facilitating bundled offerings and integrations that attract more customers.

Elastic Financial Statement Overview

Summary

Elastic demonstrates strong gross margins and cash flow management, but profitability remains a concern with negative net income. The balance sheet is stable with moderate leverage, though returns on equity are negative. Overall, the company shows potential for improvement in profitability while maintaining strong cash flow generation.

Income Statement

Elastic shows a solid gross profit margin of 75.19% TTM, indicating strong cost management. However, the net profit margin is negative at -5.38% TTM, reflecting ongoing profitability challenges. Revenue growth is modest at 4.58% TTM, suggesting a slowdown compared to previous periods. The EBIT and EBITDA margins are slightly positive, indicating some operational improvements but still under pressure.

Balance Sheet

The debt-to-equity ratio is 0.61 TTM, showing a manageable level of leverage. However, the return on equity is negative at -9.36% TTM, indicating inefficiencies in generating returns for shareholders. The equity ratio stands at 38.49% TTM, suggesting a stable capital structure with a reasonable proportion of equity financing.

Cash Flow

Elastic's free cash flow growth is strong at 19.93% TTM, highlighting effective cash management. The operating cash flow to net income ratio is 3.53 TTM, showing robust cash generation relative to net income. The free cash flow to net income ratio is nearly 1, indicating efficient conversion of earnings into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.55B	1.48B	1.27B	1.07B	862.37M	608.49M
Gross Profit	1.17B	1.10B	937.24M	772.36M	630.18M	447.44M
EBITDA	33.17M	6.05M	-78.63M	-171.49M	-157.34M	-104.29M
Net Income	-83.49M	-108.11M	61.72M	-236.16M	-203.85M	-129.43M
Balance Sheet
Total Assets	2.52B	2.59B	2.24B	1.74B	1.64B	973.17M
Cash, Cash Equivalents and Short-Term Investments	1.49B	1.40B	1.08B	915.21M	860.95M	400.81M
Total Debt	594.17M	595.01M	593.70M	594.23M	594.22M	28.18M
Total Liabilities	1.55B	1.67B	1.50B	1.34B	1.23B	522.34M
Stockholders Equity	971.36M	927.23M	738.18M	398.90M	415.43M	450.83M
Cash Flow
Free Cash Flow	314.00M	261.82M	145.31M	32.98M	-1.75M	18.32M
Operating Cash Flow	318.25M	266.17M	148.76M	35.66M	5.67M	22.55M
Investing Cash Flow	-285.52M	-118.67M	-287.96M	-272.95M	-127.27M	-1.52M
Financing Cash Flow	36.53M	40.95M	40.05M	17.47M	602.13M	77.26M

Elastic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 85.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 85.95 is below the 20-day moving average (MA) of 87.57, above the 50-day MA of 83.87, and below the 200-day MA of 91.75, indicating a neutral trend. The MACD of 0.93 indicates Positive momentum. The RSI at 50.07 is Neutral, neither overbought nor oversold. The STOCH value of 22.06 is Neutral, 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
CVLT	78 Outperform	8.46B	106.07	22.23%	―	21.62%	-53.99%
NICE	77 Outperform	9.29B	17.26	14.40%	―	11.72%	37.05%
PEGA	71 Outperform	10.04B	50.42	35.26%	0.13%	12.47%	65.19%
ESTC	65 Neutral	$9.13B	192.75	-9.65%	―	17.42%	-228.98%
U	63 Neutral	18.07B	-40.16	-13.61%	―	-13.74%	48.10%
KC	61 Neutral	4.52B	-13.89	-38.05%	―	20.42%	-9.39%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Elastic Corporate Events

Elastic Director Sohaib Abbasi to Step Down

On August 22, 2025, Sohaib Abbasi announced he would not seek re-election as a non-executive director at Elastic‘s upcoming annual general meeting. Elastic reported a strong financial performance for Q1 fiscal 2026, with a 20% year-over-year revenue increase to $415 million. The company highlighted significant growth in its Elastic Cloud and subscription revenues, alongside key product innovations and strategic partnerships. Elastic’s advancements in AI and cloud services are expected to enhance its market position and offer substantial value to stakeholders.