Elastic (ESTC) AI Stock Analysis

• Market Cap: $7.85B
• Dividend Yield: N/A
• Average Volume (3M): 2.08M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.64
• 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: 1,846,346
• 30 Day Avg. Volume: 2,082,814
• 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: 1.11
• Enterprise Value/Revenue: 5.41
• Enterprise Value/Gross Profit: 7.16
• Enterprise Value/Ebitda: 245.67
• 1Y Price Target: $102.90
• Price Target Upside: 35.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 26
• EPS Forecast (FY): 2.35
• Revenue Forecast (FY): $1.70B

• Rating: 65 Neutral
• Price Target: $81.00 ▲(6.34% 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

Elastic's strong revenue growth and improved operating margins indicate robust demand for its products, supporting long-term business expansion.

AI and Security Expansion

Expansion in AI and security enhances Elastic's competitive edge, driving strategic growth and positioning the company in high-demand sectors.

Share Repurchase Program

The share repurchase program reflects confidence in Elastic's strategy, potentially boosting shareholder value and providing financial flexibility.

Negative Factors

Profitability Challenges

Ongoing profitability challenges, indicated by negative net income, could hinder long-term financial health and investment capacity.

Billings Growth Lag

Lagging billings growth may signal potential revenue recognition issues, impacting cash flow and financial predictability.

Negative Return on Equity

Negative return on equity suggests inefficiencies in generating returns from shareholders' investments, affecting long-term value creation.

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, Elastic is best known for its flagship product, Elasticsearch, which is a distributed, RESTful search and analytics engine capable of handling large volumes of structured and unstructured data in real-time. The company operates primarily in the software sector, providing products and services that facilitate enterprise search, observability, and security use cases. In addition to Elasticsearch, Elastic offers the Elastic Stack, which includes Kibana, Beats, and Logstash, allowing users to ingest, search, analyze, and visualize data seamlessly across multiple environments.

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 shows strong revenue growth and gross profit margins, but faces profitability challenges with negative net income and EBIT margins. The balance sheet indicates improved leverage, enhancing financial stability. Cash flow management is effective, though growth has slightly declined.

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: Neutral
• Last Price: 76.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESTC, the sentiment is Neutral. The current price of 76.17 is above the 20-day moving average (MA) of 74.10, below the 50-day MA of 81.99, and below the 200-day MA of 84.80, indicating a neutral trend. The MACD of -1.94 indicates Negative momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 28.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ESTC.

Elastic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NICE	71 Outperform	$6.79B	12.26	15.23%	―	9.46%	34.09%
PEGA	69 Neutral	$9.75B	38.93	51.96%	0.16%	17.00%	120.21%
ESTC	65 Neutral	$7.85B	-73.73	-12.84%	―	16.98%	-265.85%
CVLT	65 Neutral	$5.43B	70.48	32.87%	―	22.02%	-55.25%
U	65 Neutral	$18.73B	-42.43	-13.64%	―	-8.23%	48.57%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KC	51 Neutral	$3.44B	-20.84	-15.89%	―	24.26%	55.58%

Elastic Corporate Events

Elastic Approves $29.3M Equity Award for CEO

On October 13, 2025, Elastic N.V.’s board approved a special performance-based equity award for CEO Ashutosh Kulkarni, valued at $29.3 million. This award aims to align Kulkarni’s interests with shareholders and incentivize his leadership in executing the company’s growth strategy, emphasizing substantial shareholder value creation. The award, tied to rigorous share price and performance goals, underscores the company’s commitment to transformational growth and securing a leading position in the Generative AI market.

Elastic Announces $500 Million Share Repurchase Program

On October 9, 2025, Elastic‘s Board of Directors approved a $500 million share repurchase program, reflecting confidence in the company’s business strategy and execution. The program, which has no expiration date, allows Elastic to buy back shares based on market conditions and other factors, aiming to enhance shareholder value while maintaining investment in its business.

Elastic Approves Key Proposals at Shareholder Meeting

On September 30, 2025, Elastic N.V. held its annual general meeting of shareholders in Amsterdam, where ten proposals were voted on and passed. Key decisions included the appointment of Ashutosh Kulkarni and Steven Schuurman as directors, adoption of the company’s annual accounts, and the authorization of the board to issue shares and repurchase ordinary shares, reflecting strong shareholder support for the company’s strategic directions.