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Investing.com - KeyBanc has reiterated its Sector Weight rating on Elastic NV (NYSE:ESTC) following the company’s strong fiscal first-quarter performance that exceeded expectations across all metrics. According to InvestingPro analysis, the company, currently valued at $9.28 billion, is trading near its Fair Value, with 19 analysts recently revising their earnings estimates upward.
The data layer company reported solid results as artificial intelligence moves up the stack, with KeyBanc noting that consumption software names broadly accelerated in the second calendar quarter. Management raised its fiscal year 2026 revenue guidance by 2 percentage points on a constant currency basis while maintaining its margin guidance. The company’s robust growth trajectory is evidenced by its 17.42% revenue growth and impressive 75.29% gross profit margin.
Elastic’s U.S. public sector business stabilized after experiencing elongated sales cycles in the previous quarter. Security emerged as a highlight, with one-third of the security business in the quarter coming from Security Information and Event Management (SIEM) displacements. For deeper insights into Elastic’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers exclusive ProTips and detailed metrics for over 1,400 stocks.
The company continued to see adoption in artificial intelligence, adding more $1 million Annual Contract Value Elastic Cloud customers using generative AI than in the prior two quarters combined. Management observed that AI workloads are more compute-intensive.
Despite the encouraging quarterly strength, KeyBanc maintained its Sector Weight rating, citing ongoing concerns about Elastic’s differentiation in its three main markets, the synergies between them, and intensifying competition. InvestingPro data shows the company maintains strong financial health with a current ratio of 2.09 and holds more cash than debt on its balance sheet, suggesting resilience against competitive pressures.
In other recent news, Elastic NV reported strong fiscal first-quarter results that exceeded revenue expectations. The company implemented a 5% price increase at the start of the quarter, which contributed to its positive performance. Scotiabank raised its price target for Elastic to $121, citing the strong quarter and maintaining a Sector Outperform rating. Canaccord Genuity also increased its price target to $120, reflecting a positive growth outlook. Piper Sandler raised its target to $125, noting a 24% year-over-year growth in cloud revenue. Needham reiterated a Hold rating, acknowledging the revenue beat but raising questions about the growth source. DA Davidson assumed coverage with a Neutral rating and increased its price target to $105, following Elastic’s robust quarterly results. These developments highlight the company’s strong financial performance and the positive reception from analysts.
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