Elastic (ESTC) AI Stock Analysis

• Market Cap: $5.94B
• Dividend Yield: N/A
• Average Volume (3M): 1.74M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.58
• Revenue Growth: 16.98%
• EPS Growth: -265.85%
• Country: US
• Employees: 3,403
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): N/A
• Shares Outstanding: 105,372,800
• 10 Day Avg. Volume: 1,887,014
• 30 Day Avg. Volume: 1,738,318
• 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: 0.99
• Enterprise Value/Revenue: 3.67
• Enterprise Value/Gross Profit: 4.85
• Enterprise Value/Ebitda: 166.54
• 1Y Price Target: $94.62
• Price Target Upside: 67.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 2.45
• Revenue Forecast (FY): $1.72B

• Rating: 65 Neutral
• Price Target: $61.00 ▲(8.19% Upside)
• Action: Reiterated Date: 12/09/25
• Date: Action: Reiterated 12/09/25

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

High gross margins

Sustained gross margins near 76% reflect strong pricing power and efficient delivery of software and cloud services. High margins on subscription and cloud revenue provide structural ability to invest in R&D, sales, and AI product development while moving toward sustained profitability as scale increases.

Growing subscription & cloud demand

Consistent growth in sales-led subscriptions, rising cloud adoption and expanding large-customer base show durable recurring revenue and land-and-expand dynamics. Strong CRPO and large enterprise commitments support predictable renewal streams and long-term ARPU upside as Gen AI and security use cases expand.

Improved balance sheet and cash conversion

Very low leverage and near-full conversion of losses into free cash flow give Elastic financial flexibility. A $500M repurchase program (partial execution) and disciplined cash conversion indicate the company can fund growth initiatives, M&A or returns without stressing the balance sheet.

Negative Factors

Ongoing unprofitability

Persistent negative net margins and negative ROE show Elastic has yet to translate strong top-line and gross margins into sustained GAAP profitability. Continued operating losses limit free internal capital for expansion and make longer-term strategy dependent on cash flow improvement or external financing choices.

Declining free cash flow growth

A contraction in free cash flow growth and modest operating-cash-to-income conversion reduce the cushion for reinvestment and shareholder returns. If FCF trends remain negative, Elastic may face tougher choices on R&D spend, buybacks, or margin-improvement initiatives over the medium term.

Revenue timing & concentration risks

Sensitivity to billing timing, seasonality and one-off events (e.g., government shutdown) plus reliance on sizeable enterprise commitments creates volatility in billings and recognized revenue. This concentration and timing risk can undermine revenue predictability and strain margin planning over several quarters.

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	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	1.61B	1.48B	1.27B	1.07B	862.37M	608.49M
Gross Profit	1.22B	1.10B	937.24M	772.36M	630.18M	447.44M
EBITDA	35.42M	6.05M	-78.63M	-171.49M	-157.34M	-104.29M
Net Income	-109.32M	-108.11M	61.72M	-236.16M	-203.85M	-129.43M
Balance Sheet
Total Assets	2.48B	2.59B	2.24B	1.74B	1.64B	973.17M
Cash, Cash Equivalents and Short-Term Investments	1.40B	1.40B	1.08B	915.21M	860.95M	400.81M
Total Debt	590.71M	595.01M	593.70M	594.23M	594.22M	28.18M
Total Liabilities	1.59B	1.67B	1.50B	1.34B	1.23B	522.34M
Stockholders Equity	891.11M	927.23M	738.18M	398.90M	415.43M	450.83M
Cash Flow
Free Cash Flow	302.34M	261.82M	145.31M	32.98M	-1.75M	18.32M
Operating Cash Flow	306.48M	266.17M	148.76M	35.66M	5.67M	22.55M
Investing Cash Flow	-91.03M	-118.67M	-287.96M	-272.95M	-127.27M	-1.52M
Financing Cash Flow	-72.75M	40.95M	40.05M	17.47M	602.13M	77.26M

Elastic Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.38
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• 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 56.38 is below the 20-day moving average (MA) of 62.16, below the 50-day MA of 69.92, and below the 200-day MA of 80.79, indicating a bearish trend. The MACD of -3.82 indicates Positive momentum. The RSI at 36.20 is Neutral, neither overbought nor oversold. The STOCH value of 14.16 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	76 Outperform	$7.08B	11.71	16.53%	―	9.46%	34.09%
PEGA	71 Outperform	$7.32B	19.68	57.32%	0.16%	17.00%	120.21%
ESTC	65 Neutral	$5.94B	-54.57	-12.84%	―	16.98%	-265.85%
CVLT	64 Neutral	$3.89B	45.86	34.48%	―	22.02%	-55.25%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KC	60 Neutral	$3.96B	-25.15	-15.88%	―	24.26%	55.58%
U	54 Neutral	$7.92B	-19.13	-12.53%	―	-8.23%	48.57%