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Investing.com - BofA Securities has reduced its price target on Elastic NV (NYSE:ESTC) to $90 from $111 while maintaining a Neutral rating on the enterprise search vendor. The new target aligns closely with InvestingPro’s Fair Value assessment, suggesting the stock is slightly undervalued at its current price of $82.08, after falling 9.63% over the past week.
The firm’s decision follows Elastic ’s mixed fiscal second-quarter 2026 results, which showed total revenue, Cloud revenue, and non-GAAP operating income exceeding both BofA’s and Street estimates.
Despite Elastic raising its fiscal year 2026 guidance midpoints above the second-quarter beats, BofA noted concerning deceleration in key growth metrics, particularly sales-led subscription revenue growth, which slowed to 18% year-over-year in the second quarter compared to 22% in the first quarter. Overall revenue growth stands at 16.98% for the last twelve months, with analysts expecting 15% growth for fiscal 2026.
BofA highlighted the contrast between this deceleration and management’s bullish tone during the company’s investor day held approximately one month ago, suggesting the results "are raising more questions than answers."
The price target reduction reflects a lower multiple applied to Elastic due to the decelerating growth in key metrics, though BofA continues to view the risk/reward profile as balanced while looking for strong execution from the company. While currently unprofitable with a negative EPS of -$1.04, InvestingPro data shows analysts expect Elastic to achieve profitability this fiscal year with a forecasted EPS of $2.42. Discover more insights in Elastic’s comprehensive Pro Research Report, available with an InvestingPro subscription.
In other recent news, Elastic NV reported strong financial results for the second quarter of 2026, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $0.64, exceeding analyst projections of $0.58. Revenue for the quarter reached $423 million, slightly above the anticipated $418.23 million. These results highlight Elastic’s ability to outperform market predictions. Additionally, analysts from various firms have taken note of the company’s performance, with some considering potential adjustments to their ratings. The earnings announcement reflects a positive trajectory for Elastic, as it continues to deliver results that align with or exceed market forecasts. Investors and analysts alike are closely monitoring these developments to gauge the company’s future performance.
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