DoD tests AI models that make it easy to switch from vendors like Palantir
On Wednesday, Rosenblatt Securities reiterated a Buy rating on Elastic NV (NYSE: NYSE:ESTC), currently trading at $92.85 with a market capitalization of $9.69 billion, maintaining a steady price target of $140.00. According to InvestingPro data, 22 analysts have recently revised their earnings expectations upward for the upcoming period. The firm’s analyst, Blair Abernethy, anticipates an in-line or slightly better performance for Elastic’s fourth-quarter and full-year 2025 results, which are scheduled to be released after the market closes on Thursday, May 29th. The forecast follows a 4% revenue beat in the third quarter, with the company maintaining strong fundamentals including a 74.27% gross profit margin and 17.95% year-over-year revenue growth.
Elastic has reportedly seen benefits from a restructuring of its sales team early in the fiscal year 2025, which enhanced its engagement with key enterprise customers. The company has also experienced growth due to the consolidation of its Observability/Log and SIEM Security solutions onto the Elastic platform. Additionally, there has been an uptake in customers using Elastic Search to develop applications powered by Generative AI.
According to Abernethy, the macro selling environment has remained relatively stable since the company’s third-quarter results, and Cloud Service Provider (CSP) growth levels appear to be supportive. Elastic’s unified technology platform positions it to capitalize on the ongoing trend of tool consolidation in log management, the modernization of legacy Security Information and Event Management (SIEM) systems, and the creation of GenAI applications using its Elastic Search Relevance Engine with vector database capabilities.
The analyst has chosen not to adjust the estimates ahead of the fourth-quarter results, leaving the projected growth for Elastic Cloud at 26%, consistent with the growth rate observed in the previous quarter. The $140.00 price target reflects confidence in the company’s continued performance and strategic position in the market. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 2.02, and holds more cash than debt on its balance sheet. For deeper insights into Elastic’s financial health and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Elastic NV reported robust third-quarter results for fiscal year 2025, which exceeded expectations and led Truist Securities to raise its price target from $135 to $145, maintaining a Buy rating. The company experienced increased demand for its search capabilities and Generative AI use cases, particularly among larger cloud customers. Elastic’s management indicated a return to strong execution levels and adjusted its fiscal year outlook upwards, while remaining cautious. In another development, Elastic announced a partnership with Tines to enhance security and observability workflow automation, aiming to improve security orchestration and response times. This collaboration has already benefited organizations like the Texas A&M System Cyber Operations by increasing efficiency and reducing costs. Meanwhile, Stifel reiterated a Buy rating with a $140 price target, noting improvements in Elastic’s go-to-market strategy and consumption trends. However, they expressed caution due to uncertainties related to federal spending and economic factors. TD Cowen adjusted its price target to $105, maintaining a Hold rating, citing a cautious outlook on fiscal year 2026 guidance amidst macroeconomic challenges. Cantor Fitzgerald also maintained a Neutral rating with a $109 price target, highlighting concerns over Elastic’s revenue guidance for fiscal year 2026.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.