Elastic stock price target raised to $140 at RBC Capital

On Friday, RBC Capital Markets adjusted its outlook on Elastic NV (NYSE:ESTC), increasing the price target from $130.00 to $140.00, while sustaining an Outperform rating on the company’s shares. The move comes in response to Elastic’s recent performance, which indicated a strong quarter and a recovery from earlier execution challenges. According to InvestingPro data, analyst targets for the $11.89 billion company now range from $93 to $150, reflecting varied expectations for the stock’s potential.

The company has seen broad-based strength and a return to pre-reorganization levels of sales execution, with revenue growing 18.71% over the last twelve months and maintaining an impressive 74.13% gross margin. Elastic’s consumption trends have been particularly robust among larger customers. The firm’s analysts noted that Elastic continues to gain momentum with its GenAI technology, setting it apart as one of the few software vendors that is successfully monetizing its offerings. InvestingPro analysis reveals 10+ additional insights about Elastic’s financial health and growth prospects.

In light of these developments, Elastic’s FY/25 guidance was revised upward, exceeding the recent quarter’s overperformance. The analysts believe that the company’s guidance remains conservative and could be surpassed in future periods.

Alongside the financial updates, Elastic also announced the appointment of a new Chief Financial Officer. This executive change is expected to contribute to the company’s ongoing growth and operational efficiency.

The optimistic outlook from RBC Capital Markets reflects confidence in Elastic’s strategic direction and its ability to capitalize on its innovative GenAI technology, as well as its effective sales execution and strong customer consumption trends.

In other recent news, Elastic NV reported its Q1 2025 earnings, exceeding expectations with an earnings per share (EPS) of $0.63 compared to the forecasted $0.47. The company also surpassed revenue projections, reporting $382 million against the expected $368.71 million, reflecting a 17% year-over-year growth. Elastic’s cloud segment saw a significant 26% increase, now constituting 47% of total revenue. Following these results, Truist Securities raised Elastic’s stock price target to $145, maintaining a Buy rating, citing strong demand for the company’s search and GenAI use cases. Guggenheim also increased their price target to $136, highlighting Elastic’s robust performance and revised fiscal year guidance. Canaccord Genuity and Piper Sandler both adjusted their price targets to $135, acknowledging Elastic’s consistent ability to exceed financial expectations and its growing presence in the GenAI market. These developments indicate a growing confidence among analysts in Elastic’s strategic direction and financial performance.

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