Elastic (ESTC) AI Stock Analysis

• Market Cap: $9.00B
• Dividend Yield: N/A
• Average Volume (3M): 2.00M
• Price to Earnings (P/E): 192.8
• Beta (1Y): 1.37
• Revenue Growth: 17.42%
• EPS Growth: -228.98%
• Country: US
• Employees: 3,403
• Sector: Technology
• Sector Strength: 84
• Industry: Software - Application
• EPS (TTM): 0.60
• Shares Outstanding: 106,270,940
• 10 Day Avg. Volume: 3,022,371
• 30 Day Avg. Volume: 1,996,994
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 5.13
• Enterprise Value/Gross Profit: 6.83
• Enterprise Value/Ebitda: 240.15
• 1Y Price Target: $120.70
• Price Target Upside: 42.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 24

• Rating: 68 Neutral
• Price Target: $94.00 ▲(10.97% Upside)

Elastic's strong earnings call performance and positive technical indicators are the primary drivers of its stock score. However, challenges in profitability and valuation metrics, such as a negative P/E ratio, weigh on the overall score. The company's strategic focus on AI and platform consolidation supports its growth outlook, but ongoing challenges in the U.S. public sector present risks.

Positive Factors

Financial performance

Elastic reported 1Q:FY26 revenue of $415.3 million that handily surpassed projections and EPS of $0.60 exceeded estimates, showing strong financial performance.

Growth potential

Elastic is well positioned to benefit from secular tech trends and new opportunities from the gen AI movement, indicating potential for future growth.

Negative Factors

Pricing impact

The magnitude of the upside was muddied by a 5% price increase which was not included in management's earlier guidance.

Revenue guidance

FY26 revenue guidance was raised to +14% cc vs. consensus at +12%, but it still screens conservative given implied deceleration with price increases taking effect.

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 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 shows strong revenue growth and improving cash flow management, with robust gross margins and reduced leverage. However, the company has yet to achieve net profitability due to high operational and R&D expenses.

Income Statement

Elastic has demonstrated strong revenue growth with a compound annual growth rate (CAGR) over the past five years. The gross profit margin remains robust, indicating effective cost management. However, the company has struggled to achieve net profitability, as reflected by negative net profit margins and EBIT margins, primarily due to high operational and R&D expenses typical in the software industry.

Balance Sheet

Elastic's balance sheet shows a solid equity position with a healthy equity ratio, contributing to financial stability. The company has significantly reduced its debt, leading to a low debt-to-equity ratio. However, the return on equity remains negative due to continuous net losses, suggesting room for operational improvements to enhance profitability.

Cash Flow

Elastic's cash flow from operations has improved markedly, demonstrating effective cash management and operational efficiency. The free cash flow has shown positive growth, indicating strong liquidity and the ability to fund expansion without additional debt. The operating cash flow to net income ratio suggests high quality of earnings, as cash flows exceed reported net income.

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: Positive
• Last Price: 84.71
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 84.71 is above the 20-day moving average (MA) of 79.32, above the 50-day MA of 82.75, and below the 200-day MA of 92.94, indicating a neutral trend. The MACD of 0.92 indicates Negative momentum. The RSI at 56.39 is Neutral, neither overbought nor oversold. The STOCH value of 50.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESTC.

Elastic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVLT	73 Outperform	$7.95B	99.80	25.08%	―	21.62%	-53.99%
PEGA	71 Outperform	$9.19B	46.45	41.55%	0.14%	12.47%	65.19%
NICE	70 Outperform	$8.75B	16.26	15.07%	―	11.72%	37.05%
ESTC	68 Neutral	$9.00B	192.75	-9.65%	―	17.42%	-228.98%
U	63 Neutral	$16.98B	―	-13.62%	―	-13.74%	48.10%
Sector *	61 Neutral	$35.51B	8.11	-11.05%	1.89%	8.55%	-8.72%
KC	53 Neutral	$4.02B	―	-31.02%	―	20.42%	-9.39%

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.