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Investing.com - Guggenheim raised its price target on Elastic NV (NYSE:ESTC) to $122.00 from $107.00 on Friday, while maintaining a Buy rating on the stock. The new target represents significant upside from the current price of $87.79, with InvestingPro data showing analyst targets ranging from $85 to $143.
The firm cited Elastic’s significant outperformance in revenue and profit, with the company guiding its fiscal second quarter above Street expectations and raising full-year revenue guidance. The strong results came against what Guggenheim described as "depressed expectations." According to InvestingPro data, the company has achieved 17.4% revenue growth over the last twelve months, with 19 analysts recently revising their earnings estimates upward.
Guggenheim noted that Elastic’s performance was broad-based across both commitments and consumption, driven by GenAI search initiatives that caused search revenue to accelerate for another consecutive quarter. Over 2,200 Cloud customers are using Elastic for GenAI, including 330 spending over $100,000 in annual contract value.
Platform consolidation was identified as another key driver, especially in security/SIEM, with one-third of new and expansion wins involving competitive displacements. A 5% increase in list pricing for both Cloud and Self-Managed services also contributed to the fiscal first quarter upside.
Guggenheim views Elastic’s total revenue guidance of 13% in constant currency (raised from 11%) and maintained non-GAAP operating margin of 16% as conservative, expecting the company to ultimately grow over 17% in fiscal year 2026 in constant currency. The company maintains a healthy gross profit margin of 75.3% and holds more cash than debt on its balance sheet, supporting its growth trajectory.
In other recent news, Elastic NV reported a strong fiscal first-quarter performance, surpassing expectations across all metrics. The company raised its fiscal year 2026 revenue guidance by 2 percentage points on a constant currency basis while maintaining its margin guidance. Scotiabank responded by raising its price target for Elastic to $121, attributing the positive results to a 5% price increase implemented at the beginning of the quarter. Canaccord Genuity also increased its price target to $120, maintaining a Buy rating due to the company’s optimistic growth outlook.
Additionally, Piper Sandler raised its price target to $125, highlighting the approximately 24% year-over-year growth in Elastic’s cloud revenue. KeyBanc maintained its Sector Weight rating, noting the acceleration in consumption software names, including Elastic. Meanwhile, Needham reiterated its Hold rating, despite the company’s revenue exceeding guidance by $18.3 million, or 4.6%. These recent developments indicate a generally positive reception from analysts following Elastic’s latest earnings report.
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