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Investing.com - Scotiabank lowered its price target on Elastic NV (NYSE:ESTC) to $76.00 from $90.00 on Friday, while maintaining a Sector Perform rating on the stock. This new target represents the low end of analyst projections, with the highest target currently at $150, according to InvestingPro data.
The price target reduction follows what Scotiabank described as a "tad disappointing" fiscal second-quarter top-line performance from Elastic compared to guidance and cloud peers. Despite these concerns, the company has maintained 16.98% revenue growth over the last twelve months.
Scotiabank had previously downgraded Elastic in early October, citing difficulty finding evidence that Elastic is a "standout winner in enterprise AI" during their recent checks.
The firm expressed concern that Palo Alto Networks’ acquisition of Chronosphere could create a more competitive environment for Elastic in capturing opportunities from Splunk, New Relic, and Sumo Logic displacement.
While acknowledging Elastic’s "decent" operating margin performance in the second quarter and its potential in security and observability, Scotiabank remains on the sidelines awaiting evidence that the company can "supercharge growth." InvestingPro analysis shows Elastic maintains a "GOOD" financial health score despite not being profitable over the last twelve months, with analysts expecting positive earnings this fiscal year. For deeper insights and additional ProTips on ESTC, including its comprehensive Pro Research Report, check out InvestingPro.
In other recent news, Elastic NV reported better-than-expected fiscal second-quarter results, prompting the company to raise its full-year fiscal 2026 revenue guidance by $18 million. This includes a $5.5 million beat from the second quarter. Despite the positive earnings, several firms have adjusted their price targets for Elastic. Cantor Fitzgerald lowered its price target to $85, citing cloud deceleration, while maintaining a Neutral rating. Canaccord Genuity also reduced its target to $115, attributing the change to broader multiple compression, but maintained a Buy rating. Rosenblatt reiterated its Buy rating with a price target of $130, noting that Elastic’s revenue exceeded estimates with a 16% year-over-year growth. Jefferies adjusted its target to $105, expressing concerns over growth deceleration in key metrics, despite maintaining a Buy rating. Similarly, Wells Fargo reduced its target to $75, highlighting concerns about top-line growth deceleration and execution risks. These developments reflect a mixed outlook among analysts regarding Elastic’s future performance.
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