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Investing.com - Guggenheim has reiterated its Buy rating and $122.00 price target on Elastic N.V. (NYSE:ESTC), citing expected revenue outperformance and potential guidance raises. This target represents a 32% upside from the current price of $92.46, aligning with the broader analyst consensus which remains bullish with a "Buy" recommendation and targets ranging from $90 to $150.
The research firm projects Elastic will exceed consensus expectations for second-quarter total and Cloud revenue, provide third-quarter guidance above market expectations, and raise its fiscal 2026 guidance by at least the amount of the second-quarter outperformance. With Elastic’s earnings report just 7 days away (November 20), InvestingPro data shows the company has maintained a solid 17.4% revenue growth over the last twelve months.
Guggenheim anticipates second-quarter Cloud growth to remain stable quarter-over-quarter at 24% in constant currency, compared to consensus estimates of 20%, with sales-led subscription growth holding at 22% in constant currency and total revenue increasing 18% in constant currency.
The firm believes Elastic is gaining traction across all three business areas, partly due to new capabilities resonating with customers and go-to-market changes yielding results. Guggenheim also notes that Elastic implemented a price increase on both Cloud and Self-Managed offerings in May.
Trading at 5.4x enterprise value to fiscal 2027 estimated revenue and 28x enterprise value to fiscal 2027 estimated free cash flow, Guggenheim views Elastic as an "underappreciated asset" and an AI beneficiary with architectural differentiation. InvestingPro analysis indicates the stock is fairly valued at its current price, with a P/B ratio of 10.12 considered high. While not profitable over the last twelve months, analysts predict the company will be profitable this year with an EPS forecast of $2.42 for FY2026. Discover more insights and 7 additional ProTips in the comprehensive Pro Research Report, available for Elastic and 1,400+ top US stocks through InvestingPro.
In other recent news, Elastic has announced new capabilities for its Elastic Distribution of OpenTelemetry (EDOT) SDK, enabling centralized management of SDKs across distributed systems. The new features leverage OpenTelemetry’s Open Agent Management Protocol (OpAmp) standard to streamline configuration and management processes. Additionally, S&P Global Ratings has revised its outlook for Elastic to positive from stable, citing strong earnings and expecting the company’s leverage to improve by the end of fiscal year 2026. Elastic has also introduced DiskBBQ, a disk-friendly vector search algorithm in Elasticsearch 9.2, promising more efficient vector searches at scale and reduced costs. This new algorithm eliminates the need for entire vector indexes to be kept in memory, offering predictable performance improvements. Furthermore, Elastic has integrated with Microsoft’s Azure AI Foundry, enhancing AI observability for agentic AI applications and large language models. This integration, currently in tech preview, provides real-time insights into AI workloads through pre-built dashboards. These developments reflect Elastic’s ongoing efforts to innovate and improve its offerings in the tech industry.
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