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On Friday, Canaccord Genuity adjusted its outlook on Elastic NV (NYSE:ESTC) shares, raising the price target to $135 from the previous $130 while maintaining a Buy rating on the stock. Canaccord’s analysts believe that there is still room for the stock to appreciate from its after-hours trading price, which was around $115. The stock has shown strong momentum, with InvestingPro data showing a notable 33% price return over the past six months, despite currently trading at $101.28.
The firm’s analysts are confident in Elastic’s ability to continue its trend of exceeding expectations and raising forecasts. They anticipate that Elastic will accelerate its revenue growth in the upcoming fiscal year. The new price target is based on approximately 7 times the calendar year 2026 estimated revenues. This valuation is deemed suitable for a company with mid-20s percentage growth in Software (ETR:SOWGn) as a Service (SaaS) and high-teens percentage growth in total revenue, especially one that is engaging with general artificial intelligence (genAI) workloads. InvestingPro data reveals the company’s strong fundamentals, with a healthy 74% gross profit margin and an impressive revenue growth of 19% in the last twelve months.
Canaccord’s positive stance on Elastic is rooted in the company’s strong financial performance and its strategic positioning in the market. The analysts highlighted the company’s potential to capitalize on the increasing demand for genAI technologies, which could drive further growth and profitability. According to InvestingPro analysis, Elastic maintains a strong balance sheet with more cash than debt and a current ratio of 2.0, indicating solid financial health. For deeper insights into Elastic’s financial metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Elastic has been performing well, as indicated by its ability to surpass financial expectations consistently. The company’s focus on expanding its SaaS offerings and its involvement in the burgeoning field of genAI are key factors that contribute to the analysts’ optimistic projections.
The price target increase by Canaccord Genuity signals confidence in Elastic’s future performance and its ability to sustain growth in revenue. This move may influence investor sentiment and market activity related to Elastic NV shares in the near term.
In other recent news, Elastic NV reported impressive financial results for Q1 2025, surpassing expectations with an earnings per share (EPS) of $0.63, compared to the forecasted $0.47. The company also exceeded revenue projections, reporting $382 million against the expected $368.71 million, marking a 17% year-over-year increase. Elastic’s cloud segment, a key growth driver, saw a 26% rise and now represents nearly half of the total revenue. In addition to the financial results, Piper Sandler analysts raised their price target for Elastic to $135, citing the company’s accelerating remaining performance obligations and cloud growth. The firm maintained an Overweight rating, highlighting Elastic’s GenAI technology as a significant factor in its recent performance. The analysts expressed confidence in Elastic’s ability to sustain its performance trends, particularly in the evolving GenAI landscape. Investors and market watchers will continue to monitor Elastic’s progress as it navigates the competitive landscape of GenAI and cloud services.
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