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On Friday, Piper Sandler analysts adjusted their outlook on Elastic NV (NYSE:ESTC), increasing the price target to $135 from the previous $130 while maintaining an Overweight rating. The firm’s analysts cited the company’s accelerating RPO (Remaining Performance Obligations) and cloud growth as key drivers behind the improved 3Q performance. They noted that this marks the second consecutive quarter of solid stability in Elastic’s execution. According to InvestingPro data, Elastic commands a market capitalization of $10.5 billion and has demonstrated strong revenue growth of 18.7% over the last twelve months.
Elastic’s GenAI technology was highlighted as a standout, with search capabilities accelerating and approximately 18% of the customer base that spends over $100,000 now utilizing GenAI functionality. Piper Sandler expressed confidence in the sustainability of Elastic’s recent performance trends, emphasizing the company’s growing relevance in the GenAI landscape. InvestingPro analysis reveals the company maintains robust financial health with a strong current ratio of 1.99 and holds more cash than debt on its balance sheet, supporting its innovation initiatives.
The analysts reinforced their positive stance on Elastic NV by stating, "We think the level of stability we have seen in the business over the last two quarters is sustainable and believe ESTC continues to demonstrate its relevance in the GenAI world. We remain OW and raise our PT to $135 given increased confidence."
Elastic NV’s stock performance has been under scrutiny, and the latest insights from Piper Sandler suggest a bullish outlook for the company’s future. The raised price target reflects a belief in Elastic’s ability to maintain its momentum and capitalize on its innovative technology in an evolving market.
Investors and market watchers will be keeping a close eye on Elastic NV as it continues to navigate the competitive landscape of GenAI and cloud services. The company’s ability to sustain its performance and growth will be critical in meeting the expectations set by the new price target. With a significant 33% price gain over the past six months and current trading levels suggesting slight overvaluation based on InvestingPro Fair Value metrics, investors seeking deeper insights can access comprehensive analysis and 10 additional ProTips through the full InvestingPro Research Report.
In other recent news, Elastic NV reported its Q1 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.63, compared to the forecasted $0.47. The company also exceeded revenue projections, reporting $382 million against the expected $368.71 million, marking a 17% increase year-over-year. Elastic’s cloud revenue, a significant growth driver, now constitutes 47% of total revenue, reflecting a 26% rise. The company continues to emphasize its expansion in AI capabilities, aligning with industry trends toward cloud-based solutions. In addition to its financial performance, Elastic has been actively participating in industry conferences, such as the Morgan Stanley (NYSE:MS) Technology Media and Telecom (BCBA:TECO2m) Conference and the Wells Fargo (NYSE:WFC) Software (ETR:SOWGn) Symposium. The company also announced a leadership change, with Navam Velihinda joining as the new CFO, succeeding Eric Pringle. Elastic projects Q4 revenue between $379 million and $381 million, with full fiscal year revenue guidance standing at $1,474 million to $1,476 million.
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