Gold prices bounce off 3-week lows; demand likely longer term
On Friday, RBC Capital Markets adjusted its outlook on Elastic NV (NYSE: NYSE:ESTC), reducing the price target from $119.00 to $115.00, while sustaining an Outperform rating on the shares. Currently trading at $79.36, the stock sits well below its 52-week high of $123.96. The adjustment follows Elastic’s announcement of a strong finish to the fiscal year and a positive sentiment regarding the fourth quarter and the pipeline going into the first quarter. However, the company noted macroeconomic pressures, particularly in the US public sector, which have led to longer sales cycles. According to InvestingPro data, 22 analysts have recently revised their earnings estimates upward for the upcoming period, suggesting continued confidence in the company’s prospects.
Matthew Hedberg of RBC Capital cited the company’s conservative stance on revenue guidance for the fiscal year 2026. Despite current challenges, Elastic has maintained strong revenue growth of 17% over the last twelve months, generating $1.48 billion in revenue. The new guidance takes into account potential macroeconomic challenges that could impact a broader spectrum of Elastic’s business, as well as possible consumption headwinds. These factors have not yet materialized, but the company is factoring them into its future planning.
Elastic’s management team expressed a positive tone about the company’s performance in the fourth quarter and its prospects moving into the next quarter. The company maintains a strong financial position, with InvestingPro analysis showing more cash than debt on its balance sheet and liquid assets exceeding short-term obligations. Despite this, they have opted for a cautious revenue projection for the upcoming fiscal year. This conservative approach is seen as a reasonable measure in the current economic climate, according to RBC Capital’s analysis.
The firm’s decision to maintain an Outperform rating indicates that, despite the reduced price target, RBC Capital continues to view Elastic’s stock favorably. The price target adjustment reflects the updated estimates and the potential impact of external economic factors on the company’s financial performance.
The revised price target of $115.00 represents RBC Capital’s current valuation of Elastic NV’s stock based on the firm’s expectations for the company’s financial results and market conditions. Elastic’s management has not yet observed the macro pressures and consumption headwinds they are anticipating, but the guidance has been set with these considerations in mind to prepare for any upcoming challenges.
In other recent news, Elastic NV reported fourth-quarter revenue of $388.4 million, surpassing expectations of $380.4 million. Despite this, the company’s fiscal year 2026 revenue guidance of $1.655 billion to $1.670 billion fell short of Wall Street’s projection of $1.69 billion, leading to a 12% drop in shares. Elastic’s cloud revenue rose 23% year-over-year to $181.5 million, though it was slightly below expectations. The number of customers spending over $100,000 annually increased to 1,510. Analysts have reacted to these developments with various adjustments to their outlooks. Wedbush reduced its price target to $110 but maintained an Outperform rating, while Cantor Fitzgerald cut its target to $92 with a Neutral rating. Stifel also adjusted its price target to $112, maintaining a Buy rating, and Needham kept a Hold rating amid the new CFO’s guidance. Elastic’s management remains cautious, citing challenges such as longer sales cycles and macroeconomic pressures.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.