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Investing.com - TD Cowen has reduced its price target on Elastic N.V. (NYSE:ESTC) to $85 from $90 while maintaining a Hold rating ahead of the company’s upcoming earnings report. Trading at $78.97, the stock sits between analyst targets ranging from $75 to $143, with InvestingPro data showing a consensus "Buy" recommendation.
The firm expects Elastic to deliver a modest beat and raise when it reports results on August 28, suggesting that the new CFO likely provided conservative guidance initially.
TD Cowen’s partner checks remain mixed, with the analyst noting "fine renewals but competitive factors & AI risks" affecting the company’s outlook. The firm’s partner survey showed a decline, with 67% meeting or beating expectations compared to 86% in the previous quarter.
Elastic shares have declined 14% since its last quarterly report, underperforming the IGV index which gained 5% during the same period, reflecting relatively bearish sentiment toward the stock.
At current levels, Elastic trades at approximately 4.3x EV/CY26E Sales and 20x EV/FCF, representing a discount to peers trading at roughly 5x, though TD Cowen indicates that "a return to Cloud upside is needed" for improved performance.
In other recent news, Elastic reported several significant developments. BofA Securities lowered its price target for Elastic to $96, citing increased competitive risks in AI workloads, while maintaining a Neutral rating. UBS resumed coverage of Elastic with a Buy rating but reduced its price target from $148 to $95, following discussions indicating a stable to slightly improved demand environment for Elastic’s services. Additionally, Elastic has launched a new service tier called Elastic Observability Logs Essentials on its Cloud Serverless platform, aimed at developers needing log analytics capabilities without managing infrastructure. The company also introduced ACORN and Better Binary Quantization (BBQ) technologies to enhance vector search performance and reduce costs for AI applications. Furthermore, Elastic announced that its Elastic Cloud Hosted service has achieved FedRAMP High "In Process" status on AWS GovCloud (US), marking progress in supporting sensitive U.S. federal government workloads. These updates reflect Elastic’s ongoing efforts to innovate and adapt in a competitive landscape.
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