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Investing.com - Jefferies has reduced its price target on Elastic NV (NYSE:ESTC) to $105.00 from $125.00 while maintaining a Buy rating on the stock. The shares, currently trading at $82.08, have taken a significant hit, falling 9.63% over the past week according to InvestingPro data, which also suggests the stock is slightly undervalued based on its Fair Value assessment.
The firm cited growth deceleration across several key metrics including cloud revenue, sales-led subscription revenue, and current remaining performance obligations (cRPO), which overshadowed otherwise solid quarterly results.
Elastic posted approximately a 2% beat over its original fiscal second-quarter guidance and raised its full-year fiscal 2026 guidance by $34 million over its original forecast.
The company demonstrated strong customer commitments during the quarter, securing five deals exceeding $10 million in total contract value, with two of those deals surpassing $20 million for cloud security.
Despite the growth concerns, Jefferies remains encouraged by Elastic’s security momentum and sees an attractive risk-reward profile at 3.2 times calendar year 2027 revenue versus mid-cap peers trading at approximately 5 times.
In other recent news, Elastic NV reported its second-quarter 2026 earnings, surpassing expectations with an earnings per share of $0.64, which was higher than the anticipated $0.58. The company also reported revenue of $423 million, slightly exceeding the forecasted $418.23 million. Despite these positive results, several firms have adjusted their stock price targets for Elastic. Wells Fargo lowered its target to $75, citing concerns over decelerating growth and execution risks. Stifel also reduced its price target to $108 due to slower-than-expected SaaS growth. Guggenheim adjusted its target to $116 following mixed results, noting a slowdown in revenue growth across all segments. Meanwhile, BofA Securities decreased its target to $90, despite Elastic’s total revenue and non-GAAP operating income exceeding expectations. These developments reflect a cautious outlook from analysts amidst the company’s recent performance.
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