Gold prices bounce off 3-week lows; demand likely longer term
On Tuesday, Cantor Fitzgerald reiterated a Neutral rating for Elastic NV (NYSE:ESTC), maintaining the company’s price target at $109.00, which sits between the current analyst range of $75 to $160. According to InvestingPro data, 22 analysts have recently revised their earnings upward for the upcoming period, suggesting growing confidence in the company’s prospects. The firm’s caution stems from concerns that Elastic’s initial fiscal year 2026 revenue guidance might not meet expectations. This is attributed to cautious underlying assumptions amid macroeconomic instability and potential added conservatism with the recent appointment of CFO Navam Welihinda on February 28, 2025.
Analysts at Cantor Fitzgerald highlighted that consensus expectations for Elastic’s cloud revenue growth in the fourth quarter of fiscal year 2025 are at +23.1%, a slight decrease from 26% in the previous quarter. This follows the company’s robust revenue growth of 17.95% over the last twelve months, with total revenue reaching $1.43 billion. They note that the total new business generated is estimated to be 5% lower compared to a 28% increase in the third quarter, setting a modest benchmark for the year-end report scheduled for release on Thursday, May 29, 2025, after market close.
The firm also pointed out that Elastic’s EBIT margin guidance of approximately 15% would represent a record year and a significant four-point increase compared to fiscal year 2024. However, management has indicated that investors should not anticipate a similar rate of margin improvement in fiscal year 2026 as the company plans to invest in artificial intelligence opportunities.
Cantor analysts will be looking for positive indicators of continued adoption of Elastic’s search and resource engine (ESRE). They believe that the focus on data curation and processing will persist as a driver for investments in AI technologies, as evidenced by significant investments and announcements from companies such as ServiceNow (NYSE:NOW), Atlassian (NASDAQ:TEAM), and MongoDB (NASDAQ:MDB).
Despite these potential positives, the firm remains cautious about the initial guidance for fiscal year 2026 due to the uncertain economic climate, which could negatively impact Elastic’s stock in the near term. The current price target of $109 implies a 5x enterprise value to calendar year 2026 revenue multiple, which is slightly below the company’s one-year average multiple of 6x. While Elastic maintains strong financial health with a current ratio of 2.02 and more cash than debt on its balance sheet, the stock currently trades at a high Price/Book multiple of 11.35x. Elastic’s shares have risen by 23% from the lows in April, which may have raised investor expectations ahead of the upcoming earnings report.Get deeper insights into Elastic’s valuation and growth prospects with InvestingPro, which offers exclusive access to detailed financial analysis, Fair Value estimates, and comprehensive Pro Research Reports covering 1,400+ top stocks.
In other recent news, Elastic NV has reported robust third-quarter results for fiscal year 2025, leading Truist Securities to raise the stock’s price target from $135 to $145 and maintain a Buy rating. This adjustment reflects Elastic’s improved execution and increased demand for its search capabilities and Generative AI use cases, particularly among larger cloud customers. In contrast, TD Cowen reduced its price target for Elastic from $125 to $105, maintaining a Hold rating, with expectations for a slight beat in the upcoming financial report and cautious guidance for fiscal year 2026. Stifel analysts have reiterated a Buy rating with a $140 price target, encouraged by Elastic’s go-to-market strategy improvements and operational efficiency, despite uncertainties regarding federal spending.
Additionally, DA Davidson kept a Neutral rating with a $115 price target, acknowledging Elastic’s strong quarterly performance and improved operating margins due to rising interest in generative AI. The company has also announced a partnership with Tines to enhance security and observability workflow automation, aiming to improve security orchestration and response times. This collaboration has already shown benefits, as reported by the Texas A&M System Cyber Operations. Elastic’s recent developments, including the appointment of Navam Welihinda as the new CFO, are being closely watched by investors and analysts. These updates provide insights into Elastic’s strategic direction and the challenges it faces in the current economic landscape.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.